QUESTION 3 20 Marks Pheladi Tiad, a third year Unsa student, decided to register an atchar business Tihole (Pty) Lid whereby she will be supplying atchar to franchises like Spar and Chesanyamas around Gauteng The atchar business had been in existence on a small scale for a while until Pheladi started getting orders from employees at Spar and the atchar was then discovered by the owner as a good product for increased sales Pheladi decided to apply her management accounting skills teamed as a MAC2601 student in the previous year at Unisa The following financial information was prepared for the two years ended 31 March 2018 (actual) and 31 March 2010 (budgeted) respectively Actual Budgeted 2018 2019 Units Units Produchon 7 700 2 Sales 5 500 7700 Opening inventory 1 500 7 R 440 R 435 Selling price per unit Vanable costs per unit Direct matenal Direct labour Manufacturing overheads Selling and administration 132 44 61 11 248 138 33 77 259 Fixed costs for the year Manufacturing overheads Selling overheads Administration overheads 935 000 44 000 27500 1 006 500 517 000 49 500 33 000 599 500 Additional information: 1 Tihole (Pty) Lid uses the first in first-out (FIFO) method of inventory valuation 2 Tihole (Pty) Ltd's factory has a maximum capacity of 10 000 units per annum, however, the normal capacity is 9 000 units 3 Budgeted production for the year ended 31 March 2019 is estimated to be 200 units short af normal capacity units 4 The fixed manufacturing overhead allocation rate for the year ended 31 March 2018 was R121.43 per unit the rate decreased significantly from the previous year due to Pheladi negotiating sgnificant discounts on kitchen and equipment rentals THIRN OVERI 9 MAC2601 MAYIJUN 2019 (12) In respect of Tihole (Pty) Ltd (a) Prepare the Budgeted Statement of Comprehensive Income for Tihole (Ply) Lid for the year ended 31 March 2019 according to the direct costing method (b) Calculate the value of closing inventory in terms of the absorption costing method of inwentary valuabon c) Reconcile the differences in net prolt before tax according to the two methods assuming an absorption costing net profit before tax of R629 109 and absorption costing opening inventory of R1 326 191 You may omit the reconciliation in units. (d) Evaluate whether the following statements are True or False state only TRUE or FALSE (3) 13) 11) Companies Isted on the JSE (Johannesburg Stock Exchange) are required to adopt the Absorption costing method in annual financial statements presented to the JSE (1) A qualified Chartered Accountant acting in the position of a board member does not have to adhere to the SAICA Code of Professional Conduct - she only needs to adhere to the Code when carrying out the normal duties of her full-time employment (1) Total 20 QUESTION 3 20 Marks Pheladi Tiad, a third year Unsa student, decided to register an atchar business Tihole (Pty) Lid whereby she will be supplying atchar to franchises like Spar and Chesanyamas around Gauteng The atchar business had been in existence on a small scale for a while until Pheladi started getting orders from employees at Spar and the atchar was then discovered by the owner as a good product for increased sales Pheladi decided to apply her management accounting skills teamed as a MAC2601 student in the previous year at Unisa The following financial information was prepared for the two years ended 31 March 2018 (actual) and 31 March 2010 (budgeted) respectively Actual Budgeted 2018 2019 Units Units Produchon 7 700 2 Sales 5 500 7700 Opening inventory 1 500 7 R 440 R 435 Selling price per unit Vanable costs per unit Direct matenal Direct labour Manufacturing overheads Selling and administration 132 44 61 11 248 138 33 77 259 Fixed costs for the year Manufacturing overheads Selling overheads Administration overheads 935 000 44 000 27500 1 006 500 517 000 49 500 33 000 599 500 Additional information: 1 Tihole (Pty) Lid uses the first in first-out (FIFO) method of inventory valuation 2 Tihole (Pty) Ltd's factory has a maximum capacity of 10 000 units per annum, however, the normal capacity is 9 000 units 3 Budgeted production for the year ended 31 March 2019 is estimated to be 200 units short af normal capacity units 4 The fixed manufacturing overhead allocation rate for the year ended 31 March 2018 was R121.43 per unit the rate decreased significantly from the previous year due to Pheladi negotiating sgnificant discounts on kitchen and equipment rentals THIRN OVERI 9 MAC2601 MAYIJUN 2019 (12) In respect of Tihole (Pty) Ltd (a) Prepare the Budgeted Statement of Comprehensive Income for Tihole (Ply) Lid for the year ended 31 March 2019 according to the direct costing method (b) Calculate the value of closing inventory in terms of the absorption costing method of inwentary valuabon c) Reconcile the differences in net prolt before tax according to the two methods assuming an absorption costing net profit before tax of R629 109 and absorption costing opening inventory of R1 326 191 You may omit the reconciliation in units. (d) Evaluate whether the following statements are True or False state only TRUE or FALSE (3) 13) 11) Companies Isted on the JSE (Johannesburg Stock Exchange) are required to adopt the Absorption costing method in annual financial statements presented to the JSE (1) A qualified Chartered Accountant acting in the position of a board member does not have to adhere to the SAICA Code of Professional Conduct - she only needs to adhere to the Code when carrying out the normal duties of her full-time employment (1) Total 20