Shesha Nami $($Pty$)$ Ltd $($SN$)$ is a well$-$established electronic bicycle manufacturing company

operating from its plant and distribution centre in Middelburg $($Mpumalanga$),$ South Africa. The

company has a male$-$dominated management team and is well known for its quality products

and commitment to sustainability.

SN makes two types of electrical bikes, namely the Electric mountain bike $($E$-$MTB$)$ and the

Electric city bike $($E$-$CB$).$ The E$-$MTB has a bigger frame and tyres than the E$-$CB to provide

stability and control for more rugged terrains. Both bikes make use of an electric motor, powered

by a battery, to assist with propulsion.

SN makes use of an absorption costing system and all its inventory items are valued using

the first$-$in$-$first$-$out $($FIFO$)$ method. SN has a $31$ December financial year end.

$1.$ SN$$s STANDARD AND BUDGETED INFORMATION FOR THE $2023$ FINANCIAL

YEAR

$1\mathrm{.}1.$ Inventory and manufacturing

The company had no budgeted opening and closing inventory of any type.

SN budgeted to manufacture the electronic bikes in direct proportion to its standard sales mix.

The budgeted manufacturing levels for the $2023$ financial year were equal to the company$$s

normal manufacturing capacity.

$1\mathrm{.}2.$ Sales

SN budgeted to sell $24000$ E$-$MTB and $16000$ E$-$CB units. One bike is equal to one unit. The

budget selling price per unit for E$-$MTB and E$-$CB was R$28000$ and R$26000$ respectively.

$1\mathrm{.}3.$ Variable and Fixed costs

The E$-$bike manufacturing starts with the frame and suspension made from Aluminium. The

frame and suspension are produced according to the bike$$s design and specification using

various cutting and bonding machinery.

Once the frame and suspension are ready, various components $($wheels$,$ brakes, drivetrain &

other components$)$ are attached to the frame. The key components that differentiate E$-$bikes

from traditional bicycles are the electric motor and lithium$-$ion battery which are integrated into

the bike$$s frame.

SN employs factory workers for the manufacturing and assembly process. The standard is to

allow $8\%$ idle time for these direct labourers.