MAC3701 ASSESSMENT 2 – SEMESTER 1 OF
2024
QUESTION 1
(a) Calculation of budgeted break even sales units per product type for the 2023
financial year
Calculation of Total Fixed Costs
R
Fixed manufacturing overheads 20 100 000
Selling & distribution costs [3 000 000 + (24 000 + 16 000) * 50] 1 000 000
Administrative Costs 15 000 000
36 100 000
Calculation of Contribution per unit
E - MTB E-CB
R R
Sales 28 000 26 000
Less Variable Costs (23 842.85) (22 580.25)
Aluminium [(1. 000 * 42 000); (1. 000 * 42 000)] 75.60 63
Electric Motor 3 800 3 800
Lithium – ion Battery 6 000 6 000
Various components [(1.1 * 12 500); (1 * 12 500)] 13 750 12 500
Direct labour ( * 105) 157.50 157.50
Variable manufacturing overheads ( * 13) 9.75 9.75
Selling and distribution 50 50
Contribution per unit 4 157.15 3 419.75
Sales mix = 24 000: 16 000 = 3:2
Weighted Contribution = [( * 4 157.15) + ( * 3 419.75)]
= R3 862.19
Break - even point = (Total Fixed Costs / Weighted Contribution per unit)
= (36 100 862.19)
= 9 348 units
, Break down of break even
E – MTB = (9 348 * ) = 5 609 units
E – CB = (9 348 * ) = 3 740 units
(b) Actual Statement of Profit or Loss for the 2023 financial year
E - MTB E - CB Total
R R R
Sales [(22 080 * 28 000); (14 720 * 26 000)] 618 240 000 382 720 000 1 000 960 000
Less Cost of Sales (553 884 528) (350 670 880) (904 095 408)
Production cost 571 945 980 362 105 800 934 051 780
Aluminium [(22 800 * 75.60); (15 200 * 63)] 1 723 680 957 600 2 681 280
Electrict motor [(22 800 * 3 800); (15 200 * 3 800)] 86 640 000 57 760 000 144 400 000
Lithium – ion battery [(22 800 * 6 000 * 1.1); (15 200 150 480 000 100 320 000 250 800 000
* 6 000 * 1.1)]
Various components [(22 800 * 13 750); (15 200 * 12 313 500 000 190 000 000 503 500 000
500)
Direct labour [(22 800 * 2 * 90); (15 200 * 2 * 90)] 4 104 000 2 736 000 6 840 000
Variable manufacturing overheads [(22 800 * 9.75); 222 300 148 200 370 500
(15 200 * 9.75)
Fixed manufacturing overheads [(22 800 * 2 * 335); 15 276 000 10 184 000 25 460 000
(15 200 * 2 * 335)]
Closing Inventory (18 061 452) (11 434 920) (29 496 372)
Over absorption (25 460 000 – 25 000 000) (460 000)
Gross Profit 64 355 472 32 049 120 96 864 592
Less Expenses (1 104 000) (736 000) (17 640 000)
Variable selling & distribution costs [(50 * 22 080); (50 *
14 720) 1 104 000 736 000 1 840 000
Fixed selling & distribution costs 500 000
Administrative costs (15 000 000 * 1.02) 15 300 000
Net Profit 63 251 472 31 313 120 79 224 592
Calculations
Production Budget
E-MTB E-CB
R R
Production [(24 000 * 95%); (16 000 * 95%)] 22 800 15 200
Sales [(24 000 * 92%); (16 000 * 92%)] (22 080) (14 720)
Closing Inventory 720 480
2024
QUESTION 1
(a) Calculation of budgeted break even sales units per product type for the 2023
financial year
Calculation of Total Fixed Costs
R
Fixed manufacturing overheads 20 100 000
Selling & distribution costs [3 000 000 + (24 000 + 16 000) * 50] 1 000 000
Administrative Costs 15 000 000
36 100 000
Calculation of Contribution per unit
E - MTB E-CB
R R
Sales 28 000 26 000
Less Variable Costs (23 842.85) (22 580.25)
Aluminium [(1. 000 * 42 000); (1. 000 * 42 000)] 75.60 63
Electric Motor 3 800 3 800
Lithium – ion Battery 6 000 6 000
Various components [(1.1 * 12 500); (1 * 12 500)] 13 750 12 500
Direct labour ( * 105) 157.50 157.50
Variable manufacturing overheads ( * 13) 9.75 9.75
Selling and distribution 50 50
Contribution per unit 4 157.15 3 419.75
Sales mix = 24 000: 16 000 = 3:2
Weighted Contribution = [( * 4 157.15) + ( * 3 419.75)]
= R3 862.19
Break - even point = (Total Fixed Costs / Weighted Contribution per unit)
= (36 100 862.19)
= 9 348 units
, Break down of break even
E – MTB = (9 348 * ) = 5 609 units
E – CB = (9 348 * ) = 3 740 units
(b) Actual Statement of Profit or Loss for the 2023 financial year
E - MTB E - CB Total
R R R
Sales [(22 080 * 28 000); (14 720 * 26 000)] 618 240 000 382 720 000 1 000 960 000
Less Cost of Sales (553 884 528) (350 670 880) (904 095 408)
Production cost 571 945 980 362 105 800 934 051 780
Aluminium [(22 800 * 75.60); (15 200 * 63)] 1 723 680 957 600 2 681 280
Electrict motor [(22 800 * 3 800); (15 200 * 3 800)] 86 640 000 57 760 000 144 400 000
Lithium – ion battery [(22 800 * 6 000 * 1.1); (15 200 150 480 000 100 320 000 250 800 000
* 6 000 * 1.1)]
Various components [(22 800 * 13 750); (15 200 * 12 313 500 000 190 000 000 503 500 000
500)
Direct labour [(22 800 * 2 * 90); (15 200 * 2 * 90)] 4 104 000 2 736 000 6 840 000
Variable manufacturing overheads [(22 800 * 9.75); 222 300 148 200 370 500
(15 200 * 9.75)
Fixed manufacturing overheads [(22 800 * 2 * 335); 15 276 000 10 184 000 25 460 000
(15 200 * 2 * 335)]
Closing Inventory (18 061 452) (11 434 920) (29 496 372)
Over absorption (25 460 000 – 25 000 000) (460 000)
Gross Profit 64 355 472 32 049 120 96 864 592
Less Expenses (1 104 000) (736 000) (17 640 000)
Variable selling & distribution costs [(50 * 22 080); (50 *
14 720) 1 104 000 736 000 1 840 000
Fixed selling & distribution costs 500 000
Administrative costs (15 000 000 * 1.02) 15 300 000
Net Profit 63 251 472 31 313 120 79 224 592
Calculations
Production Budget
E-MTB E-CB
R R
Production [(24 000 * 95%); (16 000 * 95%)] 22 800 15 200
Sales [(24 000 * 92%); (16 000 * 92%)] (22 080) (14 720)
Closing Inventory 720 480
