MAC3702
ASSIGNMENT 2 SEMESTER 2 2023
, MAC3702
APPLICATION OF FINANCIAL MANAGEMENT TECHNIQUES
COMPULSORY ASSIGNMENT 02 FOR THE FIRST SEMESTER
DUE DATE: 18/09/2023
UNIQUE NUMBER: 753073
Assignments submitted after 18 September 2023 will not be accepted. The system will close
exactly at midnight, and you are advised to submit earlier than the due date to avoid any
technical issues you may experience on the due date. Keep proof of your submission. No
medical certificates will be accepted on or after due dates.
This assignment has four questions totalling 100 marks.
No multiple-choice questions (MCQs) will be asked in the examination; therefore, you must
prepare to answer scenario- or case study-type questions for all the topics in this module.
This assignment is a written assignment and can either be handwritten or typed, and it must
be converted to a PDF document and submitted online on myUnisa.
DO NOT upload your assignment as read only or password-protected PDF document.
Assignments MAY NOT be submitted by post, fax, email or dropped in assignment
boxes.
YOU WILL RECEIVE 0% IF YOUR ASSIGNMENT IS POSTED, FAXED, EMAILED OR
DROPPED IN ASSIGNMENT BOXES. YOU WILL RECEIVE 0% IF YOUR UPLOADED PDF
DOCUMENT IS READ-ONLY OR PASSWORD-PROTECTED.
ONLY SUBMIT ONLINE, OTHERWISE YOUR ASSIGNMENT WILL NOT BE MARKED
Please note: It is the practice of the Department to only mark selected questions of the
written assignment. You must therefore attempt all the questions in this assignment.
MAC3702 ASSIGNMENT 2 Page 1 of 14 [TURNOVER]
, QUESTION 1 (20 marks)
Level II (Pty) Limited (“Level II”) is a manufacturing company that manufactures a wide
range of freezers and fridges. Level II wants to expand their product range and is
negotiating with Deep-zone (Pty) Limited (“Deep Zone”) which manufactures air-
conditioning units. Level II wants to acquire 100% of the shares in Deep Zone and believes
that valuable synergies exist between the two companies.
The following information in respect of Deep Zone is relevant:
Deep Zone
Abridged statement of comprehensive income for the year ending 31 December 2022
Note 2022
Rand
Turnover 977 500
787 750
Less: Raw material – purchased from supplier A 1 207 000
Raw material – purchased from supplier B 1 115 000
Labour costs – manufacturing 2 287 500
Depreciation: Manufacturing equipment 3 92 000
Marketing cost 4 51 750
Share of head office costs 34 500
Net Profit 189 750
Notes
1. The directors of Level II have just entered into an agreement with supplier A for material
and components at 75% of the cost that Deep Zone is currently paying. Raw materials
purchased from supplier B will cost Level II 10% more than what Deep Zone is currently
paying.
2. Level II’s employee salaries fall within a larger salary band than that of Deep Zone’s
employee salaries. In order to facilitate a salary adjustment, the labour costs for
manufacturing will increase by 15%.
3. Depreciation is calculated at 20% per annum on the manufacturing machine. All assets
will be taken over by Level II.
4. Level II has its own marketing division within the company, and projections by the
head of marketing show that the total cost will be 80% of what Deep Zone is currently
paying.
MAC3702 ASSIGNMENT 2 Page 2 of 14 [TURNOVER]
ASSIGNMENT 2 SEMESTER 2 2023
, MAC3702
APPLICATION OF FINANCIAL MANAGEMENT TECHNIQUES
COMPULSORY ASSIGNMENT 02 FOR THE FIRST SEMESTER
DUE DATE: 18/09/2023
UNIQUE NUMBER: 753073
Assignments submitted after 18 September 2023 will not be accepted. The system will close
exactly at midnight, and you are advised to submit earlier than the due date to avoid any
technical issues you may experience on the due date. Keep proof of your submission. No
medical certificates will be accepted on or after due dates.
This assignment has four questions totalling 100 marks.
No multiple-choice questions (MCQs) will be asked in the examination; therefore, you must
prepare to answer scenario- or case study-type questions for all the topics in this module.
This assignment is a written assignment and can either be handwritten or typed, and it must
be converted to a PDF document and submitted online on myUnisa.
DO NOT upload your assignment as read only or password-protected PDF document.
Assignments MAY NOT be submitted by post, fax, email or dropped in assignment
boxes.
YOU WILL RECEIVE 0% IF YOUR ASSIGNMENT IS POSTED, FAXED, EMAILED OR
DROPPED IN ASSIGNMENT BOXES. YOU WILL RECEIVE 0% IF YOUR UPLOADED PDF
DOCUMENT IS READ-ONLY OR PASSWORD-PROTECTED.
ONLY SUBMIT ONLINE, OTHERWISE YOUR ASSIGNMENT WILL NOT BE MARKED
Please note: It is the practice of the Department to only mark selected questions of the
written assignment. You must therefore attempt all the questions in this assignment.
MAC3702 ASSIGNMENT 2 Page 1 of 14 [TURNOVER]
, QUESTION 1 (20 marks)
Level II (Pty) Limited (“Level II”) is a manufacturing company that manufactures a wide
range of freezers and fridges. Level II wants to expand their product range and is
negotiating with Deep-zone (Pty) Limited (“Deep Zone”) which manufactures air-
conditioning units. Level II wants to acquire 100% of the shares in Deep Zone and believes
that valuable synergies exist between the two companies.
The following information in respect of Deep Zone is relevant:
Deep Zone
Abridged statement of comprehensive income for the year ending 31 December 2022
Note 2022
Rand
Turnover 977 500
787 750
Less: Raw material – purchased from supplier A 1 207 000
Raw material – purchased from supplier B 1 115 000
Labour costs – manufacturing 2 287 500
Depreciation: Manufacturing equipment 3 92 000
Marketing cost 4 51 750
Share of head office costs 34 500
Net Profit 189 750
Notes
1. The directors of Level II have just entered into an agreement with supplier A for material
and components at 75% of the cost that Deep Zone is currently paying. Raw materials
purchased from supplier B will cost Level II 10% more than what Deep Zone is currently
paying.
2. Level II’s employee salaries fall within a larger salary band than that of Deep Zone’s
employee salaries. In order to facilitate a salary adjustment, the labour costs for
manufacturing will increase by 15%.
3. Depreciation is calculated at 20% per annum on the manufacturing machine. All assets
will be taken over by Level II.
4. Level II has its own marketing division within the company, and projections by the
head of marketing show that the total cost will be 80% of what Deep Zone is currently
paying.
MAC3702 ASSIGNMENT 2 Page 2 of 14 [TURNOVER]
