Chinhoyi University of Technology is an organization that has been operating in Mashonaland West province of Zimbabwe as a learning higher institutional. Chinhoyi University of technology strives to provide quality educational standards in Zimbabwe. The university has established a number of strategic units to provide additional funds in its drive to provide high quality standards in the education sector. The farm is one of the strategic business units that was established to support the operations of the university in its drive to support $5\mathrm{.}0$ education system.

It has been observed that performance for the year ended $2018$ was not pleasing and have fallen, compared to the previous year. Therefore, chief executive officer of CUT conducted a market research to find out the reasons for the decrease. He discovered that the farm will need to rework the pricing decisions and cost structures. The CEO directed that the farm should adopt a target costing approach for its products. The required return is $23\%$ on sales revenues on all projects. Hence, the directors of the farm decided to implement target costing to manage costs and maintain the market position for $2019$ operations. A board of directors of the farm is reviewing the results of the just ended accounting period of $2019$ and as cost and management accountant you are required to

$($a$)$ Write a report to the board of directors in which you assess whether the implementation of the target costing at CUT farm was successful. $($Justify your answer with appropriate calculations$).(20$ marks$)$

Note: please use historical costs and information from operating activities in your answer by using the attached financial statements provided.

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

year ended $31$ December $2019$