MAC2601 EXAM SEM 1 OF 2025 EXPECTED SOLUTIONS

Question 1
Statement of Comprehensive Income
REVENUE
Sales Revenue(3,800 units × R760) 2,888,000

COST OF SALES
Opening Inventory 0
Cost of Production(4,500 units × R462) 2,079,000

Less: Closing Inventory(700 units × R462) -323,400
Cost of Sales 1,755,600

GROSS PROFIT 1,132,400

OPERATING EXPENSES
Commission on Sales(3,800 units × R760
145,600
× 5%)

NET PROFIT 986,800

Workings

Fixed Manufacturing Overhead Rate

Item Formula Calculation
Total Fixed Manufacturing Overhead Given R500,000
Normal Production Capacity Scientific + Ordinary 5,000 + 5,000 = 10,000 units
Total Fixed OH ÷ Total
Fixed OH Rate per unit R500,000 ÷ 10,000 = R50 per unit
Normal Capacity

Calculate Unit Product Cost (Absorption Costing)

, Cost Element Amount
Direct Material 200
Indirect Material (Variable) 60
Direct Labour 150
Packaging Cost(R40 ÷ 20 units per box) 2
Fixed Manufacturing OH 50
Total Unit Cost 462



(b) Closing Inventory Value - Direct Costing (4 marks)

Unit Cost under Direct Costing

Cost Element Amount
Direct Material 200
Indirect Material (Variable) 60
Direct Labour 150
Packaging Cost(R40 ÷ 20 units) 2
Variable Cost per Unit 412

Closing Inventory Value

Item Amount
Closing Inventory Units(4,500 - 3,800) 700 units
Closing Inventory Value(700 units ×
R288,400
R412)



(c) Budgeted vs Actual Fixed OH Rate (2 marks)

Reasons for using budgeted rate: