MAC2601 MAY/JUNE 2026 – OFFICIAL
MEMO STYLE SOLUTION
QUESTION 1 (32 marks)
1(a)(i) Over/Under absorption
Total labour hours = 118 200 hrs
Applied OH = 118 200 × 50 = R5 910 000
Actual OH = 4 528 000 + (60 000 × 12) = R5 248 000
Over-recovered OH = R662 000
1(a)(ii) Journal entry:
Dr Manufacturing Overheads Control 662 000
Cr Cost of Sales 662 000
1(b) Statement of Comprehensive Income
Description Amount (R)
Revenue 50 000 000
Cost of Sales 39 443 000
Gross Profit 10 557 000
Expenses 2 868 000
Profit 7 689 000
1(c) Inventory difference: Absorption includes fixed OH; direct costing does not.
QUESTION 2 (17 marks)
2(a) Quantity Statement
Units Number
Opening WIP 8 000
MEMO STYLE SOLUTION
QUESTION 1 (32 marks)
1(a)(i) Over/Under absorption
Total labour hours = 118 200 hrs
Applied OH = 118 200 × 50 = R5 910 000
Actual OH = 4 528 000 + (60 000 × 12) = R5 248 000
Over-recovered OH = R662 000
1(a)(ii) Journal entry:
Dr Manufacturing Overheads Control 662 000
Cr Cost of Sales 662 000
1(b) Statement of Comprehensive Income
Description Amount (R)
Revenue 50 000 000
Cost of Sales 39 443 000
Gross Profit 10 557 000
Expenses 2 868 000
Profit 7 689 000
1(c) Inventory difference: Absorption includes fixed OH; direct costing does not.
QUESTION 2 (17 marks)
2(a) Quantity Statement
Units Number
Opening WIP 8 000
