The following information was taken from the books of Fourie (Pty) Ltd (Fourie) regarding the movement of inventory for the month of March 2023. Fourie is a company that buys and sell special calculators that are used by matric students, the company supplies the calculators to high schools around the Mpumalanga province. Fourie uses the perpetual inventory system and values inventory using the First-In-First-Out (FIFO) Method.

Date Action Units

1 Balance 660 7 Purchases 600 11 Sales 700 15 Purchases 800

28 Returns from the sales 30 of 11 March

Note: the sales were from the purchases of 7 March

31 Sales 269

Unit cost price (R)

50.20 50.00

48.50

Unit selling price (R)

95.50

95.50

At the end of the month, the management accountant of Fourie came to realise that Fourie is the only supplier that has inventory of the calculators in the province, and he suggested to management that the company triples its selling price to take advantage of the situation. As a result, the selling price was tripled with effect 01 April 2023. Management is excited about the opportunity.

REQUIRED

(a) Calculate the value of the calculator inventory of Fourie as at (10)

31 March 2023 close of business, using the FIFO valuation method.

(b) Calculate the Cost of Sales of Fourie for the month of March 2023 (4)

(c) Calculate the Sales value of Fourie for the month of March 2023. (3)

(d) Determine the Gross profit for the month of March using required (b) and (c). (2)

(e)

TOTAL: [25]

MAC2601 APRIL 2023

Determine the Gross profit for the month of March using required (b) and (c).

Prepare a memorandum to the management of Fourie in which you indicate any ethical concerns you many have about the decision made by management to triple the selling price of the calculators and the implications of the concerns identified on the company. Note: Provide two (2) concerns and two (2) implications.