Namibia reported her first case of COVID-19 in March 2020. Though only a few positive cases were reported between March and June, the country witnessed a drastic surge in the number of positive cases as of mid-July. As a remedial measure by the state, the Khomas and Erongo regions were declared as restricted areas. Such a move had negatively impacted most of the economic activities in the country. Windhoek Manufacturing (Pty) Ltd is one of such companies that have been negatively affected by COVID-19. They manufacture and sell a single product. The following data relates to their production costs for July and August 2020.

July (N$)	August (N$)
Direct material cost per unit	18	?
Direct labour cost per unit	12	?
Total monthly fixed manufacturing cost	4 515	4 515

Standard monthly production is 500 units and production and sales for the two months are as follows

July	August
Sales units	450	?
Production units	430	420
Selling price per unit	N$100	N$?
Fixed selling and administration costs	N$7 500	N$7 500
Opening inventory (units)	70	?

Additional information:

	Direct material and direct labour cost per unit decreased by 5% and 10% during the month of August, respectively. Due to COVID-19, August sales volume was 10% less compared to that of July. Accordingly, the selling price per unit decreased by 5% during August. The company values its inventory according to FIFO. Variable selling and administration costs are 5% per unit sold each month

REQUIRED:	MARKS
1.1	Show the flow of units (Opening and closing inventory, Production and Sales) as well as unit costs for July and August.	6
1.2	Prepare a statement of comprehensive income for August 2020 using absorption costing principles.	7
1.3	Use your answers in 1.1 and 1.2 to calculate the profit as per marginal costing.(Only prepare a reconciliation of profits)	2
TOTAL MARKS FOR QUESTION 12	15