MAC3702 Assignment 2 Semester 1 Due 22 April 2026

UNIVERSITY OF SOUTH AFRICA
College of Accounting Sciences


⋄ ⋄ ⋄ ⋄ ⋄ ⋄ ⋄ ⋄ ⋄⋄

MAC3702: Application of Fi-
nancial Management Techniques
Assignment 2 — Semester 1, 2026

⋄ ⋄ ⋄ ⋄ ⋄ ⋄ ⋄ ⋄ ⋄⋄




MAC3702
Module Code:
Application of Financial Management Tech-
Module Name:
niques
Assignment 2
Assignment Number:
Semester 1, 2026
Semester:
22 April 2026
Due Date:
100
Total Marks:




Submitted in partial fulfilment of the requirements for MAC3702 — UNISA 2026

,UNISA | MAC3702 Assignment 2 — Semester 1, 2026



Question 1: UrbanKick Sports Limited (UKS)


(a) Expected Operating Profit for Year Ending 31 December 2025 (10 marks)


The expected operating profit is calculated in two parts: the existing operations of UKS, and
the expected operating profit from the new Nova X9 soccer boot line. The expected value is
derived by multiplying each outcome by its probability.


Part 1: Expected Operating Profit from Existing Operations


Table 1: Expected Operating Profit — Existing Operations
Operating Probability Weighted
Profit (R) Value (R)
1 600 000 20% 320 000
1 700 000 30% 510 000
1 800 000 40% 720 000
2 000 000 10% 200 000
Expected 100% 1 750 000
Profit



Part 2: Expected Operating Profit from Nova X9


First, the expected quantity (pairs) is determined:

Table 2: Expected Production Quantity — Nova X9
Quantity Probability Weighted Quan-
(pairs) tity
9 000 30% 2 700
12 500 40% 5 000
15 000 20% 3 000
18 500 10% 1 850
Expected 100% 12 550
Quantity


Next, the expected operating profit from Nova X9 is calculated:

Revenue: 12 550 pairs × R880 = R11 044 000

Variable Costs per pair:

• Direct material: R480

Page 2 of 21

, UNISA | MAC3702 Assignment 2 — Semester 1, 2026


• Direct labour: R220
• Variable overhead: R55
• Total variable cost per pair: R755

Total Variable Cost: 12 550 × R755 = R9 475 250

Contribution: R11 044 000 − R9 475 250 = R1 568 750

Fixed Costs: R450 000

Expected Operating Profit (Nova X9): R1 568 750 − R450 000 = R1 118 750


Total Expected Operating Profit


Table 3: Total Expected Operating Profit for Year Ending 31 December 2025
Description Amount (R)
Expected operating profit — existing operations 1 750 000
Expected operating profit — Nova X9 1 118 750
Total Expected Operating Profit 2 868 750




Page 3 of 21