MAC3701 ASSESSMENT 1
1. Lebo Ndlovu (“LN”) is has a small online fabric shop specialising in dressmaking
fabrics. She sells two types of fabric, measured and sold per metre. She has asked
for your assistance with the management accounting aspects of her business and
provided you with the following budgeted information:
Details Cotton Premium Total
Linen
R R R
Annual Target Profit 120 000
Selling Price per meter 120 180
Fabric Purchase cost per meter 60 90
Labour cost per hour 48 48
Variable cutting and packaging cost per meter 8 12
Monthly shop rental 3 600
Monthly utilities 1 200
Monthly insurance 900
Monthly Website hosting 750
Additional Information:
· For every 1 metre of premium linen sold, LN expects to sell 3 metres of cotton fabric.
· Cotton Fabric requires 4 minutes of labour per meter, and Premium Linen Fabric
requires 6 minutes of labour per meter.
· Variable selling cost are 2,5% of the selling price
LN’s budgeted annual total fixed costs to be used in the calculation of the break-even point
are:
a.R6 450
b.R77 400
c.R66 600
d.None of the options
e.R68 400
, 2. Lebo Ndlovu (“LN”) is has a small online fabric shop specialising in dressmaking
fabrics. She sells two types of fabric, measured and sold per metre. She has asked
for your assistance with the management accounting aspects of her business and
provided you with the following budgeted information:
Details Cotton Premium Total
Linen
R R R
Annual Target Profit 120 000
Selling Price per meter 120 180
Fabric Purchase cost per meter 60 90
Labour cost per hour 48 48
Variable cutting and packaging cost per meter 8 12
Monthly shop rental 3 600
Monthly utilities 1 200
Monthly insurance 900
Monthly Website hosting 750
Additional Information:
· For every 1 metre of premium linen sold, LN expects to sell 3 metres of cotton fabric.
· Cotton Fabric requires 4 minutes of labour per meter, and Premium Linen Fabric
requires 6 minutes of labour per meter.
· Variable selling cost are 2,5% of the selling price
LN’s budgeted weighted-average contribution margin per metre of cotton is:
a.34,35
b.51,90
c.45,80
d.22,90
e.None of the above
3. Lebo Ndlovu (“LN”) is has a small online fabric shop specialising in dressmaking
fabrics. She sells two types of fabric, measured and sold per metre. She has asked
for your assistance with the management accounting aspects of her business and
provided you with the following budgeted information:
, Details Cotton Premium Total
Linen
R R R
Annual Target Profit 120 000
Selling Price per meter 120 180
Fabric Purchase cost per meter 60 90
Labour cost per hour 48 48
Variable cutting and packaging cost per meter 8 12
Monthly shop rental 3 600
Monthly utilities 1 200
Monthly insurance 900
Monthly Website hosting 750
Additional Information:
· For every 1 metre of premium linen sold, LN expects to sell 3 metres of cotton fabric.
· Cotton Fabric requires 4 minutes of labour per meter, and Premium Linen Fabric
requires 6 minutes of labour per meter
· Variable selling cost are 2,5% of the selling price
Assume the following additional information for question 3 only:
(i) Total annual fixed costs will be R80 000
(ii) The contribution for cotton will be R90 per unit and for Linen will R110 per unit
(iii) The sales mix is 4:2
(iii) All other information remains as given
In order to achieve the estimated annual target profit, LN must sell _________ meters of
cotton and _________ meters of linen.
a.R1 333 meters of cotton and 667 meters of linen
b.690 meters of cotton and 1 379 meters of linen
c.1 379,33 meters of cotton and 689,97 meters of linen
d.1 379 meters of cotton and 690 meters of linen
e.None of the options
1. Lebo Ndlovu (“LN”) is has a small online fabric shop specialising in dressmaking
fabrics. She sells two types of fabric, measured and sold per metre. She has asked
for your assistance with the management accounting aspects of her business and
provided you with the following budgeted information:
Details Cotton Premium Total
Linen
R R R
Annual Target Profit 120 000
Selling Price per meter 120 180
Fabric Purchase cost per meter 60 90
Labour cost per hour 48 48
Variable cutting and packaging cost per meter 8 12
Monthly shop rental 3 600
Monthly utilities 1 200
Monthly insurance 900
Monthly Website hosting 750
Additional Information:
· For every 1 metre of premium linen sold, LN expects to sell 3 metres of cotton fabric.
· Cotton Fabric requires 4 minutes of labour per meter, and Premium Linen Fabric
requires 6 minutes of labour per meter.
· Variable selling cost are 2,5% of the selling price
LN’s budgeted annual total fixed costs to be used in the calculation of the break-even point
are:
a.R6 450
b.R77 400
c.R66 600
d.None of the options
e.R68 400
, 2. Lebo Ndlovu (“LN”) is has a small online fabric shop specialising in dressmaking
fabrics. She sells two types of fabric, measured and sold per metre. She has asked
for your assistance with the management accounting aspects of her business and
provided you with the following budgeted information:
Details Cotton Premium Total
Linen
R R R
Annual Target Profit 120 000
Selling Price per meter 120 180
Fabric Purchase cost per meter 60 90
Labour cost per hour 48 48
Variable cutting and packaging cost per meter 8 12
Monthly shop rental 3 600
Monthly utilities 1 200
Monthly insurance 900
Monthly Website hosting 750
Additional Information:
· For every 1 metre of premium linen sold, LN expects to sell 3 metres of cotton fabric.
· Cotton Fabric requires 4 minutes of labour per meter, and Premium Linen Fabric
requires 6 minutes of labour per meter.
· Variable selling cost are 2,5% of the selling price
LN’s budgeted weighted-average contribution margin per metre of cotton is:
a.34,35
b.51,90
c.45,80
d.22,90
e.None of the above
3. Lebo Ndlovu (“LN”) is has a small online fabric shop specialising in dressmaking
fabrics. She sells two types of fabric, measured and sold per metre. She has asked
for your assistance with the management accounting aspects of her business and
provided you with the following budgeted information:
, Details Cotton Premium Total
Linen
R R R
Annual Target Profit 120 000
Selling Price per meter 120 180
Fabric Purchase cost per meter 60 90
Labour cost per hour 48 48
Variable cutting and packaging cost per meter 8 12
Monthly shop rental 3 600
Monthly utilities 1 200
Monthly insurance 900
Monthly Website hosting 750
Additional Information:
· For every 1 metre of premium linen sold, LN expects to sell 3 metres of cotton fabric.
· Cotton Fabric requires 4 minutes of labour per meter, and Premium Linen Fabric
requires 6 minutes of labour per meter
· Variable selling cost are 2,5% of the selling price
Assume the following additional information for question 3 only:
(i) Total annual fixed costs will be R80 000
(ii) The contribution for cotton will be R90 per unit and for Linen will R110 per unit
(iii) The sales mix is 4:2
(iii) All other information remains as given
In order to achieve the estimated annual target profit, LN must sell _________ meters of
cotton and _________ meters of linen.
a.R1 333 meters of cotton and 667 meters of linen
b.690 meters of cotton and 1 379 meters of linen
c.1 379,33 meters of cotton and 689,97 meters of linen
d.1 379 meters of cotton and 690 meters of linen
e.None of the options
