MAC3761 OCTOBER 2023
QUESTION 1
For accademic needs contact
email:
Phone: 065 160 9781
We also offer virtual (Online classes) twice a week book now.
(a) Evaluation of Remuneration Policy
There is a basic pay based on the function skills and experience of employees which leads to fairness in the job environment
It is unfair that only managers are paid the additional 2.5% of sales whilst the other employees do not benefit from this incentives. The tying of
additional remuneration can lead to motivation to manipulate the sales;
It is unfair that the wage increase is strictly pegged at 4% to 6% which does not take into account other factors such as inflation
A criteria is in place to determine performance bonus which makes determination objective
The criteria used is based on controllable factors
However the bonus of other employees except executive management is based on 10% of divisional profits which may not be entirely controllable considering
that it might include uncontrollable head office allocated costs and impairment of head office allocated intangible assets
There is an unfair performance bonus system which differentiates executives from other employees
(b) Criteria for performance bonus
Revenue Growth
(Revenue 2023 - Revenue 2022) * 100
Revenue 2022
, (81 343 000 - 72 340 000) * 100
72 340
12.45% (more than the set criteria of 6%)
Return On Investment
Controllable Profit * 100
Controllable Investment
Controllable Profit = Revenue - Controllable Costs
Controllable Investment = Controllable Assets - Controllable Liabilities
Calculation of Controllable Profit
R000
Profit before interest and tax 19 660
Allocated head office costs 2 550
Controllable Profit 22 210
ALTERNATIVE (BUT LONGER FOR EXAM PURPOSES)
R000
Revenue 81 343
Direct material costs -22 814
Direct labour costs -13 550
Variable manufacturing overheads -5 831
Fixed manufacturing overheads -11 276
Administration costs -3 684
Variable selling costs -1 978
Controllable Profit 22 210
Calculation of Controllable Investment
R000
Property, plant & equipment 64 112
Intangible assets 9 750
Current assets 18 369
Provisions -6 872
Trade Payables -13 405
Controllable Investment 71 954
Return on Investment
22 210 * 100
71 954
QUESTION 1
For accademic needs contact
email:
Phone: 065 160 9781
We also offer virtual (Online classes) twice a week book now.
(a) Evaluation of Remuneration Policy
There is a basic pay based on the function skills and experience of employees which leads to fairness in the job environment
It is unfair that only managers are paid the additional 2.5% of sales whilst the other employees do not benefit from this incentives. The tying of
additional remuneration can lead to motivation to manipulate the sales;
It is unfair that the wage increase is strictly pegged at 4% to 6% which does not take into account other factors such as inflation
A criteria is in place to determine performance bonus which makes determination objective
The criteria used is based on controllable factors
However the bonus of other employees except executive management is based on 10% of divisional profits which may not be entirely controllable considering
that it might include uncontrollable head office allocated costs and impairment of head office allocated intangible assets
There is an unfair performance bonus system which differentiates executives from other employees
(b) Criteria for performance bonus
Revenue Growth
(Revenue 2023 - Revenue 2022) * 100
Revenue 2022
, (81 343 000 - 72 340 000) * 100
72 340
12.45% (more than the set criteria of 6%)
Return On Investment
Controllable Profit * 100
Controllable Investment
Controllable Profit = Revenue - Controllable Costs
Controllable Investment = Controllable Assets - Controllable Liabilities
Calculation of Controllable Profit
R000
Profit before interest and tax 19 660
Allocated head office costs 2 550
Controllable Profit 22 210
ALTERNATIVE (BUT LONGER FOR EXAM PURPOSES)
R000
Revenue 81 343
Direct material costs -22 814
Direct labour costs -13 550
Variable manufacturing overheads -5 831
Fixed manufacturing overheads -11 276
Administration costs -3 684
Variable selling costs -1 978
Controllable Profit 22 210
Calculation of Controllable Investment
R000
Property, plant & equipment 64 112
Intangible assets 9 750
Current assets 18 369
Provisions -6 872
Trade Payables -13 405
Controllable Investment 71 954
Return on Investment
22 210 * 100
71 954
