Answer ALL questions. QUESTION1 (20 Marks) 1.1 The following transactions of Surrey Manufacturers took place during November 2015 in respect of a component used in production: Nov 01 Stock on hand 03 ssued to 350 units R22 per unit 200 units 08 Returned from production to stores 50 units 18 Purchased from sup 1 800 unitsR24 per unit 800 units Issued to production 21 Returned to supplier 200 units hased on 18 November 2015 30 ssued to 700 units Required: Determine the value of closing inventory based on the First-in-first-out (FIFO) method. (13 marks) 1.2 Plaspaint Ltd sells 7 000 drums of paint each year. The inventory holding cost of one drum of paint is R8. The cost of placing an order for stock is estimated at R200. 1.2.1 Calculate the E0Q for drums of paint. 1.2.2 Calculate the number of orders that should be placed per annum. Round off calculations to the nearest whole number.) 4 marks) (3 marks) (20 Marks) QUESTION2 Shone Ltd plans to manufacture bedside lamps and the following information is a Estimated sales for the year 2016 Estimated costs for the year 2016 15 000 units at R90 each Direct material R21 per unit R6 per unit R52 000 per annum 30% of sales R68 000 per annum Direct labour Factory overheads(all Administrative ex all fixed) Required: 2.1 Calculate the break-even quantity. (nearest unit) 2.2 Calculate the break-even value 4 marks) (3 marks) (3 marks) 4 marks) (6 marks) 2.3 Calculate the break-even value using the marginal income ratio. 2.4 Calculate the selling price per unit if the profit per unit is R3. 2.5 Calculate the new break-even quantity and value if selling price is increased by R10. (20 Marks) QUESTION 3 3.1 Escourt Enterprises commenced operations on 1 May 2015, and produces a single product thatsels for R18 per unit. During the year, 150 000 units of the product were manufactured of whic 110 000 units were sold. There was no work-i Cost at the end of the year. All costs are d in the table below: Fixed Variable R3.00 per unit produced Direct materials Direct labour R2.00 per unit produced R280 000 R1.00 per unit produced R0.50 per unit sold R160 000 Marketing and administrative Required Prepare the income statement using the Marginal Costing method for the year ended 30 April 2016 (10 marks) 3.2 V. Amla is employed by Waltec Limited. The normal working week is 45 hours. He worked for 47 hours during the last week of November 2015 and is remunerated at R100 per hour during normal working hours. Overtime is calculated at 15 times the normal rate. The following are his deductions for the week: Medical aid fund Pension fund 7.5% of the normal wages R820 Income tax Waltec Limited contributes the same amount as the employees towards the medical aid fund and pension funod. Required Calculate the net wage of V. Amla for the last week of November 2015 (10 marks) QUESTION 4 (20 Marks) Drummond (Ltd) need to invest in machinery for projects M and N. However due to constraint financial resources the only be able to invest in one of them. You are n the foll d data Project M Project N Initial cost 720 000 760 000 Net profit(Loss) 20 000) 82 000 151 000 190 000 114 000 114 000 114 000 114 000 114 000 ear Year 2 Year 3 ear Year 5 67 000 Additional information: 1. Project M machinery will be disposed of at the end of year 5 with a scrap value of R80 000 2. Project N machinery will be disposed of at the end of year 5 with a nil scrap value. 3. Depreciation is calculated on a straight line basis. 4. The discount rate to be used by the company is 12%. Required 4.1 Calculate the accounting rate of return for project M and N 4.2 Determine the payback period for each project. (note: net profit+ depreciation+scrap value cash inflows) 4.3 Calculate the net present value of each project. 4.4 Using your answers from question 4.3 above, choose with reasons the most suitable (5 marks) 6 marks) 6 marks) (3 marks) project? QUESTION 5 (20 Marks) The information provided below relates to Saldanah Enterprises. 1. The bank balance on 30 September 2015 was R2 000 (CR). 2. Actual and budgeted sales are as follows: September 2015 October 2015 November 2015 220 000 200 000 240 000 Cash sales are estimated at 10% of total sales. Debtors are expected to settle their accounts as follows 70% during the month of sale (These debtors receive a 5% discount.) 30% in the following month. 3. Actual and budgeted purchases for each month are as follows: September 2015 October 2015 120 000 100 000 November 2015 110 000 Fifty percent (50%) of all purchases are for cash. Creditors are paid in full in the month following the purchase transaction. 4. Rent expense amounts to R8 000 per month, payable monthly. Rent wil increase by 10% from 01 November 2015 5. Variable selling and administrative expenses are estimated at 25% of sales. They are payable during the month of sale. 6. Insurance amounts to R30 000 per annum payable monthly 7. The proprietor intends to make the following drawings during November 2015: Cash R12 000 Trading merchandise, R3 000 Required 5.1 Prepare a Debtors collection schedule for October and November 2015. 5.2 Prepare the Cash budget for October and November 2015. Note: Where applicable, round off all amounts to the nearest Rand (6 marks) (14 marks) END OF PAPER