A Answer ALL the questions in this section. Question 1 [30 MARKS] Khumalo Oil Manufacturers plan to produce a new product called Double P and the following information is available. Expected Sales for July 2020 10 000 units at R300 each Expected variable cost for July 2020 Direct materials R20 per unit Direct labour R10 per unit Selling expenses Expected fixed costs for July 2020 Factory expenses Administrative expenses 1.1 Calculate the marginal income per unit 1.2 Calculate the break even quantity 1.3 Calculate the break-even value 1.4 Calculate the marginal income ratio Question 2 10% of sales R5 160 R15 000 (2 marks) (3 marks) (2 marks) (3 marks) ABC Ltd. has a single manufacturing process of which the following overhead cost estimates are available for the period ending 31 December 20X2: R Raw materials receiving and inspection cost 18 720 Electricity Materials handling cost Total 23 400 16 380 58 500 Three products, namely A, B and C, are manufactured by labourers. The raw material arrives in bundles and is then processed further using electrical drills, which are operated by hand. The labourers are paid a wage of R50 per hour. The following estimates are applicable for the period ending 31 December 20X2 Units manufactured Product A 2 200 Product B Product C 1.650 880 Raw material received (total bundles) 11,00 6.00 18.00 Data per manufactured unit Direct material (m2) Direct material (R) 4,00 6.00 3.00 6.50 3,90 7,80 Direct labour (minutes of drilling) 24.00 40,00 60,00 Number of electric drilling jobs 7,00 4,00 3,00 Overheads are currently allocated to products by means of a rate based on labour hours. An activity-based investigation identified the following cost drivers: Activity cost pool Material receiving and inspection Electricity Material handling Round off all your figures to two decimal places. Cost drivers Number of material bundles Number of drilling jobs m2 handled 2.1 Prepare a summary for the budgeted product cost per unit for each product (A, B and C) for the period ending 31 December 20X2, where the unit cost for each of the cost elements is set out: In terms of the current method of overhead allocation (8 marks) 2.2 Prepare a summary for the budgeted product cost per unit for each product (A, B and C) for the period ending 31 December 20X2, where the unit cost for each of the cost elements is set out by using the identified cost drivers and on the basis of ABC principles (12 marks)