La Fragrance $($pty$)$ ltd $($La Fragrance$)$ manufactures and sells scented candles nationwide. The entity's premise is located in Durban and is divided into two Manufacuring Divisions as well as a Head Office. Manufacturing Division $1$: To produce scented candles, La Fragrance purchases beeswax at R$90$ per kilogram from a local bee farmer. Division $1$ places the beeswax into an oven for $30$ minutes to melt it$.$ The oven has a capacity of $80$ kilograms of wax from which $400$ scented candles can be manufactured. The same quantity of melted wax is obtained as placed into the oven. Once the wax has melted, natural fragranced oils are added to the wax. These oils are purchased from Perfume Ltd at R$2300$ per liter. Natural oils are required to be added to the melted wax in the ratio of $1$kg wax: $15$ml oil. The fragranced wax is then poured into a plastic containe$4$r in which it will also be sold. The containers are purchased at R$1\mathrm{.}80$ each and $200$ grams of fragranced wax is poured into each. Last, a $6$cm wick is placed into the wax before the product cools down and becomes soild. The cost is R$34$ per $10$ meters of a rope of wick. To assist in the above process, $37$ staff memebers are employed. These employees are apid R$110$ per hour. All of them work $40$ hours per week. A manager is employed to oversee the above process and take responsibility for Division $1$ and its activities. This manager is paud a salary of R$57000$ per month. Once the fragranced wax has settled in the container, the resulting candle can be sold to customers at R$470$ per candle by Division $1.$ Division $1$ has the capacity to manufacture $2200$ candles per month, although it currently only manufactures $2050$ candles monthly as required by Division $2.$ Manufacuring machinery utilised in Division $1$ had a cost price of R$440000$ and has a useful life of $5$ year.

Manufacturing Division $2$: The manufcatured pp

are handed over to Divsion $2,$ in which the candles are attractively packaged to be rready for offical resale by La Fragrance. Packaging amounts to R$16$ per scented candle.

$23$ employees work in divsion $2$ and each receives R$130$ per hour. These employees work $40$ hours per week. The manager, who is employed to oversee the process and take respnsibility for Divison $2$ and its activites, is paid R$46000$ per month. Once the candles are ready for offical sale, the candles are delivered to the respective customers, such as large retail shops. The delivery expense amounts to R$11$ per unit and its absorbed by Divsion $2.$

Head office:

The head office is responsible for making over decisionsm the adminstration and accounting $,$ and the financial duties of La Fragence. The head office employees' total salaries amount to R$1200000$ monthly.

Additional information:

$-$ As all machinery is expected to be used evenly throughout its useful life, La Fragrance elected the straight$-$line depreciation method.

$-$ The absorption costing method is applied, and direct labour hours of the relevant division are used as the allocation basis.

$-$ when the scewnted candles is transferred between Divison $1$ and Divsion $2,$ Divsion $1$ sells to Divsion $2$ at a cost$-$based price with s mark$-$up of $14\%.$

$-$The final product ready for offical sale by La fragrance is sold for R$560$ per candle.

$-$ Each scented candle is considered a unit.

$-$ No opening or closing inventory was present in either Divsion $1$ or $2$ during any period on the $2024$ financial year.

$-$ The entity has a $28$ February Finacial year end.

Assume all amounts have $4$ weeks for standardisation purposes.

REQUIRED:

$1\mathrm{.}1$ Prepare a statement of Comprehensive Income for Division $1$ for the month of $31$ July $2023.$

for Question $1\mathrm{.}1$ ONLY. assume one of Divsion $1\text{'}$s employees took unpaid leave during July $2023,$ and consequently the employee worked only $136$ hours during the month of July $2023.(27$ marks$)$