MAC1501 ASSIGNMENT 1 MEMO 2026
QUESTION 1 (15 marks, 18 minutes)
This question consists of two parts: Part A and Part B. Answer each part separately.
PART A (5 marks, 6 minutes)
For each of the questions below, read carefully through the information provided and select only the
QUESTION 1 – OPTIONS STUDY GUIDE
PART A (MCQ)
A1 (b) variable; direct proportion p. 25: Total variable cost increases in
proportion with the increase in the
number of units produced, but variable
cost per unit remains the same.
A2 (d) all of the above p. 20: Cost assignment can be through
direct tracing, allocation or
apportionment.
A3 (a) Standard costing p. 45-46: Standard costing uses
predetermined rates for all elements - it
is a basis for measuring input costs.
(Absorption/marginal are valuation
methods; ABC is overhead assignment
method; process costing is
accumulation method.)
A4 (c) by law be registered with p. 7: Ethical issues - competence, bias,
CIMA confidentiality. No legal requirement for
CIMA registration.
, A5 (b) Popularity p. 7 & CIMA definition: Integrity,
confidentiality, competence - popularity is
not an ethical principle.
PART B (10 marks)
Given: Production/sales = 500 units
Prime costs = R1 070 000
Conversion costs = R950 000
Total manufacturing costs = R1 590 000
Selling & admin costs = R480 000 (70% fixed)
Manufacturing overheads: 60% variable, 40% fixed
Calculations:
Direct materials, DL = Direct labour, MOH = Manufacturing overheads.
From total manufacturing costs:
DM + DL + MOH = 1 590 000
Prime costs (DM+DL) = 1 070 000
∴ MOH = 1 590 000 – 1 070 000 = R520 000
From conversion costs (DL + MOH) = 950 000
∴ DL = 950 000 – 520 000 = R430 000
From prime costs: DM = 1 070 000 – 430 000 = R640 000
(B1) Direct materials = R640 000
(B2) Direct labour = R430 000
Total variable costs per unit:
QUESTION 1 (15 marks, 18 minutes)
This question consists of two parts: Part A and Part B. Answer each part separately.
PART A (5 marks, 6 minutes)
For each of the questions below, read carefully through the information provided and select only the
QUESTION 1 – OPTIONS STUDY GUIDE
PART A (MCQ)
A1 (b) variable; direct proportion p. 25: Total variable cost increases in
proportion with the increase in the
number of units produced, but variable
cost per unit remains the same.
A2 (d) all of the above p. 20: Cost assignment can be through
direct tracing, allocation or
apportionment.
A3 (a) Standard costing p. 45-46: Standard costing uses
predetermined rates for all elements - it
is a basis for measuring input costs.
(Absorption/marginal are valuation
methods; ABC is overhead assignment
method; process costing is
accumulation method.)
A4 (c) by law be registered with p. 7: Ethical issues - competence, bias,
CIMA confidentiality. No legal requirement for
CIMA registration.
, A5 (b) Popularity p. 7 & CIMA definition: Integrity,
confidentiality, competence - popularity is
not an ethical principle.
PART B (10 marks)
Given: Production/sales = 500 units
Prime costs = R1 070 000
Conversion costs = R950 000
Total manufacturing costs = R1 590 000
Selling & admin costs = R480 000 (70% fixed)
Manufacturing overheads: 60% variable, 40% fixed
Calculations:
Direct materials, DL = Direct labour, MOH = Manufacturing overheads.
From total manufacturing costs:
DM + DL + MOH = 1 590 000
Prime costs (DM+DL) = 1 070 000
∴ MOH = 1 590 000 – 1 070 000 = R520 000
From conversion costs (DL + MOH) = 950 000
∴ DL = 950 000 – 520 000 = R430 000
From prime costs: DM = 1 070 000 – 430 000 = R640 000
(B1) Direct materials = R640 000
(B2) Direct labour = R430 000
Total variable costs per unit:
