FACULTY/COLLEGE College of Business and Economics

SCHOOL School of Accounting

DEPARTMENT Commercial Accounting
CAMPUS(ES) SWC
MODULE NAME Cost & Financial Management 3A
MODULE CODE CFM33A3
SEMESTER First
ASSESSMENT OPPORTUNITY Third Assessment Opportunity

ASSESSMENT DATE 16 May 2022 SESSION 10:30 – 12:00

ASSESSOR(S) M Janse van Rensburg, L Joubert, K Motaung
MODERATOR(S) C Koto
DURATION 1.5 hours (90 min) TOTAL 37
MARKS

NUMBER OF PAGES OF QUESTION PAPER (Including cover 17

page)

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INFORMATION / INSTRUCTIONS:
________________________________________________________________________
NUMBER OF QUESTIONS: 12
NUMBER OF MARKS IN TOTAL: 37

Assessment date: 16 May at 10:30 online.

AO3 will be available in the 2022 Assessments folder at 10:30.
You have 1.5 hours to complete the assessment – from 10H30 – 12H00.
You have one attempt.
Save after each question.
Questions are given one at a time, and you are not allowed to go back once you have gone to
the next question. If you skip a question, you cannot return to it.
Late submissions will be penalised by way of a time-weighted calculation.

PLEASE TYPE YOUR ANSWER EXACTLY AS INDICATED IN THE NOTE OF EACH

QUESTION. YOU WILL LOSE MARKS IF THE ANSWER IS NOT INDICATED AS REQUIRED.

EVERY QUESTION SHOULD BE TREATED AS AN INDIVIDUAL QUESTION – NONE OF THE

QUESTIONS IS LINKED. TREAT EACH QUESTION IN ISOLATION.
Please keep a working paper and a pen ready for your calculations.

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or CFM related issues during the test. This will allow us to clear your attempt and provide you
with a second attempt.
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_______________________________________________________________________

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during an assessment as per UJ Academic Regulations and Assessment Policy. I
understand that persons who are not registered for a relevant module and are present
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I agree by clicking ‘begin.’

_______________________________________________________________________

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MC Multiple Choice
CF Calculated Formula
MB Multiple blanks
FB Fill in the blanks
MA Multiple answers

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QUESTION 1 Flexible budget (student receives 1/6 – options A-F) MB (14)

Option A:

Mr Photo manufactures and sells selfie stands for smartphones. These stands are lightweight,
and the legs can wrap around objects to photograph unusual angles. The selfie stands’ sales
volume tends to decrease slightly during winter months, which might be because fewer people
go on holiday during winter and therefore do not require a selfie stand to take photos.

The following is the budgeted information for June 2022:

Sales (250 units) R150,000

Raw material R33,750
Direct labour (R110 per hour) R41,250
Total manufacturing overheads (*note 1) R27,600
Profit R47,400

*Note 1

Total manufacturing overheads are based on units produced. In 2022 the highest number of
units produced was in May when 280 selfie stands were produced for a total manufacturing cost
of R30,060. The lowest was in April when only 110 units were produced for R16,120.

The following information relates to the actual results:

 Two hundred and fifteen units were sold in the current period for a total value of
R130,075.
 Raw material amounted to R137 per unit.
 Employees were paid R105 per hour; the total hours worked was 344.
 Variable manufacturing overheads per unit remained the same as estimated, while the
fixed manufacturing overheads for the month were 5 per cent (%) more than estimated.

Required:

Complete the flexible budget below.

Note: Round to the nearest full Rand, no decimals. No spaces.

Remember “R” for Rand; e.g. R1000

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5
Extraction of the Flexible budget for the period
Flex Actual
Sales [A] R130,075
Raw material [B] R29,455
Direct labour [C] [D]
Variable manufacturing overheads [F] ?
Fixed manufacturing overheads [G] [H]

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QUESTION 2 Flexible budget interpretation (student receive 1/1) FB (4)

Mr Photo manufactures and sells selfie stands for smartphones. These stands are lightweight,
and the legs can wrap around objects to photograph unusual angles. The selfie stands sales’
volume tends to decrease slightly during the winter months, which might be because fewer
people go on holiday during winter and therefore do not require a selfie stand to take photos.

The general manager of Mr Photo compares the actual results with the static budget to exercise
budget control. The cost structure of Mr Photo consists of 90% of variable costs. She is
concerned because there is usually a substantial variance between the budgeted and the actual
profit.

Required:

Please write an email to the general manager of Mr Photo explaining whether it is advisable/or
not advisable to compare the actual results with the static budget to exercise budget control.

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QUESTION 3 Flexible budget variance (student receive 1/20) CF (2)

Mr Photo manufactures and sells selfie rings for smartphones. These selfie rings have three
lighting modes: cold, natural, and warm. Selfie rings are currently very popular among students.

The following information is available for April:

Budget Actual
Sales 400 units @ R160 per ring 420 units @ R165 per ring
Raw material R30 per ring R32 per ring

Required:

Calculate the variance in the flexible budget for raw materials.

Note: Round to the nearest full Rand, no decimals. No spaces.

Remember “R” for Rand, e.g. R1000.

Just type your answer, do NOT indicate the positive or negative amount.

Formula: = (DxC)-(CxB) Variants: 20

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QUESTION 4 Flexible budget F/U (student receives 1/20) CF (1)

Mr Photo is a photography business for family events. Mr Photo is still new to the industry and
uses specials to encourage business. Service fees on packages are charged on an hourly
basis.

Required:

Indicate whether the following variance in the flexible budget is favourable (F) or unfavourable
(U).

Note: Do not provide the variance amount. Only indicate F or U.

Extraction of the Flexible budget for the period

Flex Actual
Service fee R8,500 R7,650

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QUESTION 5 (student receives 1/20 for all 8 questions) CF (16)

Mr Photo prints photos on magnetic tiles that can be used as décor on fridges. These tiles are
especially popular as memorable gifts. The company uses an absorption costing system. Below
is the budgeted information for 30 April:

Quantity R
Sales 20,000 units R180,000
Magnets 2,000 meters R30,000
Direct labour 2,400 hours R60,000
Manufacturing overheads R25,000

During April, the company produced and sold 200 more tiles than anticipated at a selling price of
R10 each. The following information was recorded:

 Magnets purchased and used per tile is 0.11 meters at R14.50 per meter.
 Direct labour time spent is 6 minutes at R30 per hour.

The company measures the sales margin volume variance by using sales margin.

Required:

5.1 Calculate the standard price in the ‘sales price variance’.

Note: Round to the nearest two decimals. No spaces.

Use a period (full stop) and not a comma!

Remember “R” for Rand, e.g. R1000.00

Formula: = 180000/A Variants: 20

5.2 Calculate the actual quantity in the ‘sales price variance’.

Note: Round to the nearest two decimals. No spaces, e.g., 1000.00

Use a period (full stop) and not a comma!

Formula: = A+200 Variants: 20

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5.3 Calculate the sales margin price in the ‘sales margin volume variance’.

Note: Round to the nearest two decimals. No spaces.

Use a period (full stop) and not a comma!

Remember “R” for Rand, e.g. R1000.00

Formula: = (180000-B-60000-25000)/A Variants: 20

5.4 Calculate the standard price in the ‘material price variance’.

Note: Round to the nearest two decimals. No spaces.

Use a period (full stop) and not a comma!

Remember “R” for Rand, e.g. R1000.00

Formula: = B/2000 Variants: 20

5.5 Calculate the actual quantity in the ‘material price variance’.

Note: Round to the nearest two decimals. No spaces, e.g., 1000.00

Use a period (full stop) and not a comma!

Formula: = (A+200)x0.11 Variants: 20

5.6 Calculate the standard quantity in the ‘material quantity variance’.

Note: Round to the nearest two decimals. No spaces, e.g., 1000.00

Use a period (full stop) and not a comma!

Formula: = (A+200)x(2000/A) Variants: 20

5.7 Calculate the actual quantity in the ‘material quantity variance’.

Note: Round to the nearest two decimals. No spaces, e.g., 1000.00

Use a period (full stop) and not a comma!

Formula: = (A+200)x0.11 Variants: 20

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5.8 Calculate the actual hours in the ‘labour rate variance’.

Note: Round to the nearest two decimals. No spaces, e.g., 1000.00

Use a period (full stop) and not a comma!

Formula: = (A+200)x0.1 Variants: 20

Paper Total [37]

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