QUESTION 1

Do some research (use sources other than your prescribed textbook) on the traditional costing system and the activitybased costing (ABC) system and answer the following questions. Remember to reference your answer and add your reference list to the bottom of this question.

a) Discuss any two differences between the traditional costing system and the activitybased costing (ABC) system for a business.

b) Identify one characteristic in organisation that make them more suited to using ABC method as opposed to the traditional costing method. Provide a reason for your answer.

c) Discuss three advantages of activitybased costing.

QUESTION 2

Harry's Meat Cart, a registered VAT vendor, has several debtors and creditors. All debtors and creditors are registered for VAT, and deal in standard rated supplies. VAT is charged at 15%. The following balance appeared in the books of Harry's Meat Cart on 1 March 2020:

Carl Niemand (Debtor) (D1250) Dr Balance R 22 580

_____________________________________________________________________________________________________________________

Date Details of transaction

______________________________________________________________________________________________________________________

1 Sold goods on credit to Carl Niemand, R 35 220 (including VAT).

_______________________________________________________________________________________________________________________

4 Realised that the previous invoice was undercast by R 400 (including VAT).

Mr Niemand was contacted in this regard and he accepted the corrected amount.

_______________________________________________________________________________________________________________________

7 Carl Niemand settled his account balance as at 1 March 2020 (R 22 580) and took

advantage of the 2% settlement discount Harry's Meat Cart had offered him for

prompt payment. Round to the nearest rand.

__________________________________________________________________________________________________________________________

15 BBA Bank informed Harry's Meat Cart that Carl Niemand's cheque, received on the 7th was

dishonoured due to insufficient funds.

__________________________________________________________________________________________________________________________

23 Carl Niemand bought good on credit, R 14 150 excluding VAT.

___________________________________________________________________________________________________________________________

28 Carl Niemand returned goods purchased on the 23rd for R 2 750 (including VAT)

_____________________________________________________________________________________________________________________________

30 Carl Niemand's lawyer informed Harry's Meat Cart that Carl Niemand had been liquidated. His lawyer

sent a cheque constituting a payment of 50 cents in the rand. The rest of the debt was written off.

___________________________________________________________________________________________________________________________

Required:

Prepare the individual account of Carl Niemand (D1250) in the debtors ledger of Harry's Meat Cart from the information provided above for the month of March 2020.

Round to the nearest rand.

Note: In the "Document Number" column in yourr answer booklet provide only the correct name of the document, document numbers and transaction codes are not required.