Faculty Commerce, Management and Law

Department School of Accounting

Subject Management Accounting 1A
Subject code CAAM 3691
Date 9 May 2023
Duration 54 Minutes
Marks 30

MEMO FOR TEST 3

EXAMINER: T. Nakweenda

MODERATOR: S. Kapenambili

This memorandum consists of two questions and three pages (including this front pages).

UNIVERSITY OF NAMIBIA EXAMINATIONS

Question 1 12

Question 2 18

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 Question 1 (12 Marks)

1.1. N$ Marks Total

1.1.1. Total direct material cost (N$1 012.5 x 45) 45,562.50 0.5
Total direct labour cost (N$1 462.5 x 45) 65,812.50 0.5
Add: Applied overhead cost (N$1 000 ÷ 50 units) x 45 units) 900.00 1
Total production cost 112,275.00 0.5
Divided by units produced 45 0.5
Production cost per unit 2,495.00 1
Add: Profit (25/75 x N$2 495) 831.67 1
Selling price per unit 3,326.67 1 6

1.1.2. Selling price per unit 3,326.67 0.5 p

Units delivered 45 0.5
Total sales revenue 149,700.00 0.5
Less: Cost of sales (45 @ N$75) - 112,275.00 0.5 p
Gross profit 37,425.00 1 3
Gross profit margin 25%
9
1.2.
1.2.1. Certified work
-Progess payments based on certificates issued by architects
or engineers, which specifies the value of work completed over
which payment should be based. 1

1.2.2. Uncertified work

-Portion of work performed since the last certificate. 1

1.2.3. Retention money

-Money withheld for a specified period after the completion of
the contract and aimed at rectifying any defects that may
occur afterwards. 1 3

12
Question 2 (18 Marks)

2.1. Products
Aplha Omega Sigma Total Marks Total
Production volume (units) 20,000 22,500 30,000
Machine hours per unit 1.5 1 2
Total machine hours 30,000 22,500 60,000 112,500 (A) 2

Total Overhead cost 2,475,000.00 (B) 0.5

Absorption Overhead Rate = B ÷ A 22.00 1

Overhead cost per unit (1.5;1; 2 x N$22) 33.00 22.00 44.00 1.5 p
5

2.2. Cost driver rate

Set-ups
205 000/205= N$1 000 per production run 1,000.00 0.5

Dispatch
525 000/250 =N$ 2 100 per dispatch 2,100.00 0.5

Inspection and quality control

725 000/400 = N$ 1 812,50 per inspection 1,812.50 0.5

Machinery maintenance and depreciation

650 000/165 000 = N$ 3,94 per machine hour 3.94 0.5

Technical department
370 000/100 = N$ 3 700 per engineering change 3,700.00 0.5

PRODUCTS
Aplha Omega Sigma
Set-ups 52,000.00 80,000.00 73,000.00 1.5
Dispatches 159,600.00 172,200.00 193,200.00 1.5
Inspection and quality control 228,375.00 337,125.00 155,875.00 1.5
Machinery maintenance and depreciation 173,333.33 98,484.85 378,181.82 1.5
Technical department 148,000.00 103,600.00 118,400.00 1.5
Total overheads 761,308.33 791,409.85 918,656.82 3
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