Note 1 2 3 4 5 QUESTION 2 15 MARKS Vets on Vaal, is a veterinary practice situated in Parys, a small town in the Free State. Vets on Vaal is both a small and large animal vet practice. The practice provides veterinary care services to farmers with livestock as well as local pet owners in town. Livestock (large animals) are mostly treated at the owners' premises (farms) and the vet is required to travel to the farmer. All small animals are treated at the veterinary's practice in town. The following budgeted costs are expected for the 2021 Financial year. Cost item R Salaries 3 250 000 Medical consumables 476 000 Laboratory testing 682 000 Rent 102 000 Administration cost 975 000 Notes: 1. The practice has four veterinarians in their employment. Two vets are focused on the large animal services and the other two vets practice on small animals. Large animal vets are remunerated at an annual cost of R845 000 and small animal vets earn R780 000 per annum. 2. Medical consumables consist of needles, injections, cotton swabs and disinfectant liquids Large animals consume twice as much medical consumables compared to small animals. 3. Laboratory testing is done on chronically ill animals to diagnose the underlying cause of the illness. 4. The premises are rented at a monthly rental of R$ 500. 5. The administration cost involves the opening of a client file, printing a report on the diagnosis and handling the payment of the customer. The following information has been made available by the accountant for your consideration: Cost Driver Small Animal Large animal Total Floor space occupied 1 350m 650m 2000m Number of animals treated 3400 1 200 4 600 Number of laboratory test 680 250 930 To date, the accountant has followed a simplified cost allocation method, calculating a single cost recovery rate based on the number of animals treated by the practice overall. The accountant proposed the budgeted consultation fee for a small animal to be R950 and a for large animal MACC371 - FIRST OPP-2020 3/10 R1 200. Based on his estimations this should yield profitable results for the practice, as these fees are greater than the average budgeted consultation cost he has already calculated. QUESTION 4 20 MARKS MACCS71 - FIRST OPP-2020 310 Poleck a company specialising in the manufacturing and selling of these for botting beverages The company only ses 300ml and 500ml plastic bottles. These botes high demands they are produced locally and can easily be recycled at a minimal additional cost The management has prepared a sales budget for the quarter ended 30 September 2000 abled below Month July August September R R Sales 1440 000 1710000 &500 000 Additional information for the quarter ended 30 September 2020 Polise has always sold twice as many 300mboties compared to 50 pastic bottes This trend is not expected to change during the quarter ended 30 September 2000 The budgeted soling price for a 300ml bottle is a while a som bolest Production is scheduled in such a way that the company has enough totes on hand the end of each month to meet 30% of next mone's total budgeted sales eurement . The main materialsed for the production of bones are polystyrenden The table below shows the material usage requirements for each bottle Product 300ml bottle Polyethylene Sgrams Ethylene The production manager expects the following mentory levels for the Polyethylene Ethylene 30ml bottles 500ml bottles 1 July 2020 1000 30 September 2020 500kg 20 tres 80.000 60 000 i Polsek's policy to not keep any work progress on hand and During the previous quarter ended 30 June 2020, polyethylene was purchased average of RSO per kilogram whethylene was bought to R120 per te Athough the purchase price of polyethylene is not expected to change during the quarter the purchase price of ethylene is expected to increase by 10% with effect from 1 November 2020 Additional information for the quarter ended 30 September 2020 Based on past experiena, 20% of total sales are cash sales and the rest of the sales credit Collections from credit sales are as follows 60% in the more and is subject to a mere discount 30% one month after the month of sale and 6% two months after the month of sale and the remainder is collectible The financial accountant has indicated that the total bad debts amounting to R8000 and R50 000 was expected to be written off in the quartier ended 30 September 2006. These amounts MACCS71 - FIRST OPP - 2020 relate to sales made in May and June 2020 spectively and the write company's customer collection trends above that have remained unchanged sine 1 Janary 2020 Note 1 2 3 4 5 QUESTION 2 15 MARKS Vets on Vaal, is a veterinary practice situated in Parys, a small town in the Free State. Vets on Vaal is both a small and large animal vet practice. The practice provides veterinary care services to farmers with livestock as well as local pet owners in town. Livestock (large animals) are mostly treated at the owners' premises (farms) and the vet is required to travel to the farmer. All small animals are treated at the veterinary's practice in town. The following budgeted costs are expected for the 2021 Financial year. Cost item R Salaries 3 250 000 Medical consumables 476 000 Laboratory testing 682 000 Rent 102 000 Administration cost 975 000 Notes: 1. The practice has four veterinarians in their employment. Two vets are focused on the large animal services and the other two vets practice on small animals. Large animal vets are remunerated at an annual cost of R845 000 and small animal vets earn R780 000 per annum. 2. Medical consumables consist of needles, injections, cotton swabs and disinfectant liquids Large animals consume twice as much medical consumables compared to small animals. 3. Laboratory testing is done on chronically ill animals to diagnose the underlying cause of the illness. 4. The premises are rented at a monthly rental of R$ 500. 5. The administration cost involves the opening of a client file, printing a report on the diagnosis and handling the payment of the customer. The following information has been made available by the accountant for your consideration: Cost Driver Small Animal Large animal Total Floor space occupied 1 350m 650m 2000m Number of animals treated 3400 1 200 4 600 Number of laboratory test 680 250 930 To date, the accountant has followed a simplified cost allocation method, calculating a single cost recovery rate based on the number of animals treated by the practice overall. The accountant proposed the budgeted consultation fee for a small animal to be R950 and a for large animal MACC371 - FIRST OPP-2020 3/10 R1 200. Based on his estimations this should yield profitable results for the practice, as these fees are greater than the average budgeted consultation cost he has already calculated. QUESTION 4 20 MARKS MACCS71 - FIRST OPP-2020 310 Poleck a company specialising in the manufacturing and selling of these for botting beverages The company only ses 300ml and 500ml plastic bottles. These botes high demands they are produced locally and can easily be recycled at a minimal additional cost The management has prepared a sales budget for the quarter ended 30 September 2000 abled below Month July August September R R Sales 1440 000 1710000 &500 000 Additional information for the quarter ended 30 September 2020 Polise has always sold twice as many 300mboties compared to 50 pastic bottes This trend is not expected to change during the quarter ended 30 September 2000 The budgeted soling price for a 300ml bottle is a while a som bolest Production is scheduled in such a way that the company has enough totes on hand the end of each month to meet 30% of next mone's total budgeted sales eurement . The main materialsed for the production of bones are polystyrenden The table below shows the material usage requirements for each bottle Product 300ml bottle Polyethylene Sgrams Ethylene The production manager expects the following mentory levels for the Polyethylene Ethylene 30ml bottles 500ml bottles 1 July 2020 1000 30 September 2020 500kg 20 tres 80.000 60 000 i Polsek's policy to not keep any work progress on hand and During the previous quarter ended 30 June 2020, polyethylene was purchased average of RSO per kilogram whethylene was bought to R120 per te Athough the purchase price of polyethylene is not expected to change during the quarter the purchase price of ethylene is expected to increase by 10% with effect from 1 November 2020 Additional information for the quarter ended 30 September 2020 Based on past experiena, 20% of total sales are cash sales and the rest of the sales credit Collections from credit sales are as follows 60% in the more and is subject to a mere discount 30% one month after the month of sale and 6% two months after the month of sale and the remainder is collectible The financial accountant has indicated that the total bad debts amounting to R8000 and R50 000 was expected to be written off in the quartier ended 30 September 2006. These amounts MACCS71 - FIRST OPP - 2020 relate to sales made in May and June 2020 spectively and the write company's customer collection trends above that have remained unchanged sine 1 Janary 2020