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QUESTION 1 5 0 MARKS You have recently joined Slam ( Pty ) Ltd , a company that manufactures and distributes brake pads to the
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You have recently joined Slam Pty Ltd a company that manufactures and distributes brake pads to the automotive industry, as a financial accountant. The managing director and majority shareholder has asked you to assist him in interpreting the draft financial results for the year ended April and to review the budget for the new financial year. The company uses firstinfist out method of inventory valuation. As part of his preparations for the budget for the financial year ending April the accountant completed a breakeven analysis and concluded that the breakeven production and sales volume amounted to units. The fact that the company only sold units but is reporting a preliminary profit of R for the year ended April has raised a concern about the integrity of the information generated by finance. You established the following:
The draft income statement for the year ended April is as follows:
tableAmount ZARSalesCost of sales,@ Inventory at beginning of year,@ Raw materials,@ Direct labour costs,@ Manufacturing overheads,@ Inventory at the end of the year: finished products,
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