,MAC2601 ASSIGNMENT 3 SEMESTER 2 2026
DUE DATE: 15 SEPTEMBER 2026
QUESTION 1 (24 Marks)
Preliminary Calculations & Cost Analysis
1. Variable Overhead Rate per Unit & Fixed Overhead Total (High-Low Method)
Using 2023 and 2024 actual historical data:
Particulars Calculation Amount
Variable Overhead Rate per (R800 000 - R600 000) / (20 000 - 10 R20 per
unit 000) unit
Total Fixed Overhead R800 000 - (R20 × 20 000) R400 000
Variable Overhead Rate = (High Cost - Low Cost) / (High Activity - Low Activity)
Variable Overhead Rate = (R800 000 - R600 000) / (20 000 units - 10 000 units)
Variable Overhead Rate = R200 000 units = R20 per unit
Total Overhead = Fixed Overhead + (Variable Rate × Activity)
R800 000 = Fixed Overhead + (R20 × 20 000)
R800 000 = Fixed Overhead + R400 000
Fixed Overhead = R400 000
2. Pre-determined Fixed Manufacturing Overhead Rate for 2025
Particulars Calculation Amount
Budgeted Fixed Manufacturing Overhead Given R400 000
, Budgeted Production Units Given 20 000 units
Pre-determined Fixed Overhead Rate R400 000 R20 per unit
3. Actual Unit Summary for 2025
Particulars Units
Budgeted Production 20 000
Actual Production 20 000
Budgeted Sales 20 000
Actual Sales 20 000 - 2 000 = 18 000
Opening Inventory 0
Actual Closing Inventory 20 000 - 18 000 = 2 000
4. Selling Price & Variable Costs per Unit (2025 Actuals)
Particulars Calculation Amount
Actual Selling Price per unit R280 × 1.25 R350
Direct Materials per unit Given R80
Direct Labour per unit Given R60
Variable Overhead per unit Calculated R20
Total Variable Manufacturing Cost per unit R80 + R60 + R20 R160
Variable Selling Cost per unit Given R30
Total Absorption Cost per unit R160 + R20 R180
5. Fixed Overhead Under/Over Absorption (2025 Actuals)
Particulars Calculation Amount
Actual Fixed Manufacturing Overhead Incurred Given R700 000
Applied/Absorbed Fixed Overhead 20 000 × R20 R400 000
Under-absorbed Fixed Manufacturing Overhead R700 000 - R400 000 R300 000
DUE DATE: 15 SEPTEMBER 2026
QUESTION 1 (24 Marks)
Preliminary Calculations & Cost Analysis
1. Variable Overhead Rate per Unit & Fixed Overhead Total (High-Low Method)
Using 2023 and 2024 actual historical data:
Particulars Calculation Amount
Variable Overhead Rate per (R800 000 - R600 000) / (20 000 - 10 R20 per
unit 000) unit
Total Fixed Overhead R800 000 - (R20 × 20 000) R400 000
Variable Overhead Rate = (High Cost - Low Cost) / (High Activity - Low Activity)
Variable Overhead Rate = (R800 000 - R600 000) / (20 000 units - 10 000 units)
Variable Overhead Rate = R200 000 units = R20 per unit
Total Overhead = Fixed Overhead + (Variable Rate × Activity)
R800 000 = Fixed Overhead + (R20 × 20 000)
R800 000 = Fixed Overhead + R400 000
Fixed Overhead = R400 000
2. Pre-determined Fixed Manufacturing Overhead Rate for 2025
Particulars Calculation Amount
Budgeted Fixed Manufacturing Overhead Given R400 000
, Budgeted Production Units Given 20 000 units
Pre-determined Fixed Overhead Rate R400 000 R20 per unit
3. Actual Unit Summary for 2025
Particulars Units
Budgeted Production 20 000
Actual Production 20 000
Budgeted Sales 20 000
Actual Sales 20 000 - 2 000 = 18 000
Opening Inventory 0
Actual Closing Inventory 20 000 - 18 000 = 2 000
4. Selling Price & Variable Costs per Unit (2025 Actuals)
Particulars Calculation Amount
Actual Selling Price per unit R280 × 1.25 R350
Direct Materials per unit Given R80
Direct Labour per unit Given R60
Variable Overhead per unit Calculated R20
Total Variable Manufacturing Cost per unit R80 + R60 + R20 R160
Variable Selling Cost per unit Given R30
Total Absorption Cost per unit R160 + R20 R180
5. Fixed Overhead Under/Over Absorption (2025 Actuals)
Particulars Calculation Amount
Actual Fixed Manufacturing Overhead Incurred Given R700 000
Applied/Absorbed Fixed Overhead 20 000 × R20 R400 000
Under-absorbed Fixed Manufacturing Overhead R700 000 - R400 000 R300 000
