MAC3701 EXAM DUE 02 JUNE 2025 PASS GUARANTEED COMPLETE ANSWERS

MAC3701 Part A Solutions
Part A-a: Budgeted Margin of Safety Calculation (15 marks)
Step 1: Calculate Break-even Point for Each Product

Variable Cost per Unit Calculations:

ICBZ
Item RCBZ Calculations RCBZ Amount (R) ICBZ Calculations Amount
(R)
0.20 kg × R175,000/1000
CopperZ 35 0.50 kg × R175,000/1000 kg 87,5
kg
Thermoplastic 0.16 kg × R50 8 0.26 kg × R50 13
Technical Components 1 set × R150 150 1.5 sets × R150 225
Direct Labour (72/60) hrs × R80 96 (120/60) hrs × R80 160
Variable Manufacturing
(30/60) hrs × R50 25 (60/60) hrs × R50 50
Overhead
Selling & Distribution 5% × R900 45 5% × R1,685 84,25
Total Variable Cost per Unit 359 619,75


Contribution per Unit:

Product Selling Price (R) Variable Cost (R) Contribution (R)
RCBZ 900 359 541
ICBZ 1 685,00 619,75 1 065,25

Fixed Costs Allocation:

Item Calculation Amount (R)

, Fixed Manufacturing (300,000 + 100,000) ×
48 000 000
Overhead R120
Fixed Administrative Costs 16 500 000

Fixed Selling & Distribution 7 500 000

Total Fixed Costs 72 000 000

Break-even Analysis:

Using simultaneous equations to find break-even mix:

Let x = RCBZ units, y = ICBZ units
Sales mix ratio: 300,000 : 100,000 = 3:1
Therefore: x = 3y


Combined contribution = 541x + 1,065.25y = 72,000,000
Substituting: 541(3y) + 1,065.25y = 72,000,000
1,623y + 1,065.25y = 72,000,000
2,688.25y = 72,000,000
y = 26,787 units (ICBZ)
x = 80,361 units (RCBZ)
Margin of Safety Calculation:

Break-even Sales
Product Budgeted Sales (units) Margin of Safety (units)
(units)
RCBZ 300 000 80 361 219 639
ICBZ 100 000 26 787 73 213


Part A-b: Risk Analysis (10 marks)
Social Risks: