Rock Solid concrete manufacturers supply cement mixture directly to both the construction industry and building supply retailers located throughout the country. The company has three machines each with a 100% capacity (60 hours) of 40 tons per week. Due to electricity supply concerns, the machines have only been able to operate at 75% capacity. One ton of cement mixture requires 400 kg of Product M and 600 kg of Product N. Ignore any wastage. Product M is purchased at R80/kg and Product N at R25/kg. Each machine requires five operators. Assume four (4) weeks per month. All materials purchased are used in the mix of cement and all cement is sold in the month it is manufactured. The cement plant takes up 90% of the total floor space. The following is an extract of some of the transactions for the month: PRODUCT COST PERIOD COST NO TRANSACTION Direct Material Direct Labour Manufacturing Overheads Admin Cost Marketing/ Distribution/ Selling cost 1 Purchase the required quantity of Product M for the month. 2 Purchase the required quantity of Product N for the month. 3 The machine operators earn R2 000 each per week. 4 The factory supervisor earns R35 000 per month. 5 Depreciation per machine per annum amounts to R156 000. 6 Rates and taxes amount to R18 000 per month. Apportion the cost according to floor space. 7 Each machine requires 15 litres of oil per 20-hour 21; 22; 23 2023 The Independent Institute of Education (Pty) Ltd 2023 Page 5 of 7 operation. Oil costs R275 per litre. 8 The general manager earns R50 000 per month. 9 Carriage on sales amounts to R3 500 per 5 tons delivered. 10 Salesmen commission amounts to R15 per bag sold, the cement is packaged in bags of 20kg each. Required: Q.2.1 Calculate the total number of tons of cement mixture manufactured per month. (3) Q.2.2 Complete the above table by using monthly cost figures. Redraw the table. You do not need to copy the transaction detail. Only use the question number to indicate the question answered. (27) Question 3 (Marks: 15) Do some research and answer the following independent questions in relation to the management of working capital in your own words. Remember to reference your answers clearly. REQUIRED: Q.3.1 Discuss overtrading including three consequences of overtrading to a business. Remember to answer in your own words. (8) Q.3.2 Discuss technical insolvency and explain how this is different from absolute insolvency. Remember to answer in your own words. (7) 21; 22; 23 2023 The Independent Institute of Education (Pty) Ltd 2023 Page 6 of 7 Question 4 (Marks: 20) The following schedule of assets and liabilities relates to Kona Enterprises. Their year-end is 28 February. 2022 2023 Income received in advance 2 000 1 000 Input VAT 3 000 3 500 Output VAT 6 500 11 500 Prepaid expenses 7 500 5 000 Accumulated depreciation: Equipment 30 000 35 000 Equipment 90 000 100 000 Fixed deposit (maturing on 31 May 2023) 40 000 40 000 Savings account 13 500 18 500 Bank overdraft 0 4 500 Accrued expenses 16 000 10 500 Accrued income 9 500 12 000 Trade receivables 34 000 41 500 Trading inventory 105 000 115 000 Land and Buildings 950 000 950 000 Mortgage loan: Vida Bank 450 000 380 000 Trade payables 150 000 170 000 REQUIRED: Q.4.1 Calculate the level of working capital (total current assets) as at the financial years ended 28 February 2022 and 28 February 2023. (8) Q.4.2 Calculate the total for current liabilities as at the financial year ending 28 February 2022 and 2023. (6) Q.4.3 Calculate the net working capital as at the two dates for statement of financial position, as well as the current ratio for each year. Comment on the companys liquidity position and the related risk it poses to potential financiers. Round all answers to two decimal places.