FACULTY OF COMMERCE,
MANAGEMENT & LAW
DISTANCE MODE ASSIGNMENT
LETTER
Academic Year 2023
Semester (1)
[Management Accounting 1A AAM3691]
A MUST, TO READ THE ENTIRE
DOCUMENT
Page 1 of 19
FACULTY OF COMMERCE, MANAGEMENT AND LAW
OLD CURRICULUM MODULES
ACCOUNTING, ECONOMIC & MANAGEMENT
SCIENCES
1.
ASSIGNMENT ADMINISTRATION
CORE CALENDAR FOR DISTANCE AND ONLINE COURSES – 2023
SEMESTER 1
MONTH
DATES
ACTIVITIES
Schools
Creation of Moodle courses for Distance and Online mode
eLearning training
Lectures for first Semester- Senior Students
Lectures for first semester- First Year Students
February
14 February
Semester 1 Commences
eLearning training
Online Pedagogies course offering for UNAM Academics
March
20-24 March 2023
Compulsory Virtual Vacation School
All Schools
FIRST ASSESSMENT: 1st SEMESTER MODULES
28 March
29 -31 March 2023
Due date: 01st Assessment of 01 Semester Modules Only
Grace Period for assessment submission/ completion
School of Accounting, School of Business
Management, Governance & Economics
School of Law
MAKE-UP/ COMPENSATORY ASSESSMENT 1: 1st SEMESTER MODULES
April
17 April
Make-up assessment due date: 1st Assessment
– Only applicable if you score 1-39% in Assignment 1.
Take note that a new assessment (test or assignment) is
to be submitted.
Page 2 of 19
School of Accounting, School of Business
Management, Governance & Economics
School of Law
FACULTY OF COMMERCE, MANAGEMENT AND LAW
OLD CURRICULUM MODULES
SECOND ASSESSMENT: 1st SEMESTER MODULES
18 April
19-21 April
Due date: 02nd Assessment of 01 Semester Modules Only
Grace Period for assessment submission/ completion
School of Accounting, School of Business
Management, Governance & Economics
School of Law
April
MAKE-UP/ COMPENSATORY ASSESSMENT 2: 1st SEMESTER MODULES
9 May
Make-up assessment due date: 2nd Assessment
– Only applicable if you score 1-39% in Assignment 1.
Take note that a new assessment (test or assignment) is
to be submitted.
School of Accounting, School of Business
Management, Governance & Economics
School of Law
Year Modules
29 March
30 March -1 April
March
27 April
17 July
July
18-20 July
22 August
August
Due date: Year modules Assignment 1
Grace Period: Year module Assignment 1
Make-up/ Compensatory assessment due date: 1st
Assessment Year Modules
– Only applicable if you score 1-39% in Assignment 1.
Take note that a new assessment (test or assignment) is
to be submitted.
Due date: Year modules Assignment 2
Grace Period: Year module Assignment 2
Make-up/ Compensatory assessment due date: 2nd
Assessment Year Modules
– Only applicable if you score 1-39% in Assignment 1.
Take note that a new assessment (test or assignment) is
to be submitted.
Page 3 of 19
School of Accounting, School of Business
Management, Governance & Economics
School of Law
School of Accounting, School of Business
Management, Governance & Economics
School of Law
FACULTY OF COMMERCE, MANAGEMENT AND LAW
OLD CURRICULUM MODULES
31 August
September
Due date: Year modules Assignment 3
1-3 September
Grace Period: Year module Assignment 3
18 September
12 May 2023
Make-up/ Compensatory assessment due date: 3rd
Assessment Year Modules
– Only applicable if you score 1-39% in Assignment 1.
Take note that a new assessment (test or assignment) is
to be submitted.
Lectures end for First Semester
17 May 2023
20 May 2023
CA Marks Due
Semester 1 First opportunity Examinations
31 May 2023
Semester 1 Second opportunity Examinations
School of Accounting, School of Business
Management, Governance & Economics
School of Law
All Schools
For modules that will have online tests, all information shall be communicated well in advance. Kindly take note that some modules might
have 3 to 4 assessments. E.g.
2 assignments and 1 to 2 online tests. All necessary information will be shared timely.
Good luck!
Page 4 of 19
FACULTY OF COMMERCE, MANAGEMENT AND LAW
OLD CURRICULUM MODULES
2023 Distance Mode Assignments
[Management Accounting 1A - AAM3691]
Dear Student,
Welcome to the University of Namibia. We are confident that your studies and hard work will be rewarded with
success. We kindly advise that you obtain all the relevant information and booklets available for distance
students from your Moodle platform (including the 2023 Student Information Letter, Online Assignment
Submission Guide and other documents). These documents will provide guidance on how to approach
your studies and will guide you through your study materials as well as providing useful administrative
information in submitting assignments.
1. Study materials
Your study guide is essentially your “teacher/lecturer”. However, in addition, you are required to visit the library
to consult prescribed books and recommended readings that are indicated in the study guide as well as
browse the Internet in general. You are also responsible to purchase any prescribed textbooks required for
your respective courses/modules. Furthermore, you are strongly advised to follow the guidelines in the Online
Assignment Submission Guide available on Moodle.
2. Collaborative Learning
Unam avails all your modules through Moodle, enabling you to interact with your fellow students online through
forum discussions and chats. You can use the same platform to engage with your lecturers and tutors
regarding academic support. Please take advantage of Moodle to avoid isolation and strengthen your
interaction with colleagues, ask for help, and share/receive resources to aid your learning process. See below
how to access forum discussions on Moodle:
Figure 1: Forums in courses
3. Submission of assignments
It is very important to complete and submit a clean, clear and well-argued assignment for marking. Make sure
that you have understood the questions in order to answer them correctly. It is your responsibility to make
sure that every page of the completed assignment is correctly numbered before submitting your assignment.
As from 2017, ALL assignments are submitted through the Moodle Learning Management System. This
is an online platform where you will access all your modules and related information such as course outlines,
course notes and other learning materials that your lecturer/tutor may choose to share with you. Moodle is
accessible here: http://elearning.unam.edu.na. You should complete and submit all assignments on or before
the given due date in the assignment letter if you wish to obtain your CA marks and qualify for examinations.
UNAM always updates its assignment covers on an annual and semester basis. Please ensure that you have
used the latest assignment cover. The latest assignment cover is availed on each course on Moodle.
Page 5 of 19
FACULTY OF COMMERCE, MANAGEMENT AND LAW
OLD CURRICULUM MODULES
A user guide is available on how to submit your assignment in each module on the Distance Education
Common Space and you can access it on the Online Support system. Pay close attention to the following key
points listed at the beginning of the guide on:
3.1 How you would know when you have successfully submitted your assignment:
that is when the submission status shows “Submitted for grading”
Figure 2: Assignment submission status
MAKE SURE THE SYSTEM GIVES YOU A CONFIRMATION OF SUBMISSION by the submission
status shown as "Submitted for grading" when done. If that status is NOT displayed when done, IT
DOES NOT COUNT AS A SUBMISSION.
3.2 Errors to avoid when submitting your assignment (committing these errors may result in
you failing to submit your assignments and therefore potentially failing your course)
a. You are submitting on the correct Module/Course
b. You have selected and uploaded the correct Assignment document from your
computer
c. You are submitting the correct Assignment number for the respective activity (i.e.
Assignment 1, 2, etc.)
3.3 How to check the assessment feedback when your assignment has been graded.
4. Due Dates
All assignment due dates for 2022 are published on second page of this assignment letter. With the shift from
manual to online assignment submission since 2017, due dates are automated and non-negotiable. This
means that you would be required to submit your assignments ON or BEFORE the due date set on your
assignment (before 11h55 PM). After the date has passed (i.e. 12h00AM of the next day) the assignment
submission will be disabled, and you would no longer be able to submit your assignment. Please note
that assignment submissions will be open long before the due dates.
Page 6 of 19
FACULTY OF COMMERCE, MANAGEMENT AND LAW
OLD CURRICULUM MODULES
Please note that your assignment due dates are on page 2 of this Tutorial Letter. Use this assignment due
dates to set up your calendar tool on your mobile phone or computer to set reminders for yourself and manage
your time. Another way to keep pace with due dates, is by regularly visiting your Timeline of each of your
courses on Moodle on the Course Overview. Also download the Moodle mobile app to access Moodle on your
mobile phone or tablet and have access to notifications about due dates at your fingertips from Google Play
Store for Android or Apple App Store for IOS.
5. Submission of Assignments
Due to challenges with Internet connectivity and speed, large files may take too long to upload, which is a big
risk if you wait until the last minute to submit your assignments. You are therefore strongly advised NOT to
wait until the final hours of the due dates to submit your assignments to avoid disappointments. You are also
advised to ensure that you are in an area with good Internet connectivity when submitting your assignments.
Timely submission of all assignments on or before the given due date is crucial for the timely grading and
processing of your CA marks and determining admission to exams.
Take note that assignments should never be submitted directly by email or hard copy to individual
tutors or any other staff members of the University of Namibia.
6. Academic Support
One every Moodle course there is an embedded Academic Support section with materials to assist you with
your writing process (see Figure 3 below). Go through the videos in order to enhance your writing process
and submit better quality assignments.
Figure 3: Academic Support tutorials
7. Grace Period
A grace period refers to three (3) additional days added after your assignment due date.
The purpose of this grace period is to provide each student with time to verify and or to
make amendments to assignments already submitted. These changes may include
correcting errors like submitting a file to a wrong module or on a wrong assignment;
submitting a wrong file; losing internet connectivity, etc. An example would be that a student
attempting to submit an assignment and they lose internet connection would still be able to
try again the day after at a different place or when the connection has been restored.
8. Plagiarism Control
It has been observed that some students copy information from the Internet and paste into
their assignments without acknowledging the sources of the information. This is called
Page 7 of 19
FACULTY OF COMMERCE, MANAGEMENT AND LAW
OLD CURRICULUM MODULES
plagiarism. A copy of the Policy on Academic Integrity has been provided to you on every
course on Moodle. Please note that plagiarism which includes copying and pasting
information from the Internet would not be tolerated, shall result in your assignments
declared null and void and graded as a “0”. All assignments submitted through Moodle
would be checked for plagiarism using plagiarism detection software. You are therefore
strongly urged to acknowledge EVERY source that you use for your assignment by using
the appropriate citations and references following the referencing style prescribed by your
lecturers (APA Referencing guides are available freely online). Find one here:
http://www.uofa.edu/docs/apa-documentation.pdf
Any assignment found with high similarity scores or with evidence of clear attempts to cheat
such as submitting an assignment that is not your own would result in a zero (0) grade.
9. Vacation schools
Attending vacation school is COMPULSORY and the vacation school timetable will be made available
through the UNAM Moodle
10. My UNAM Portal and Moodle
We recommend that you regularly (at least twice a week) access your “My UNAM Portal”
(http://my.unam.edu.na) for your registration status and information, and Moodle
(https://elearning.unam.edu.na ) for your learning and assessment information.
Also visit the Distance Education Common Space on Moodle where you can find all
necessary information and user manuals related to your distance mode studies and also
engage with other students studying on distance mode. See additional information under
Section 11 below.
11. Online Support (Ticketing) System
An online support system is provided where you can report some of the issues that you may experience
regarding your studies. This system is easily accessible from the Moodle LMS system.
Figure 4: Online ticketing system
You can also make use of the Online Support (Ticketing System) for queries to be responded to by the
responsible person within 48 hours. We recommend you use this system for Help Topics or issues listed on
the system rather than email or telephone calls.
12. Online information, Tutorials and Distance Education Common Space
Information and Tutorials are provided in each course on the Moodle Learning Management
System which you should first familiarise yourself once you first access your courses.
Page 8 of 19
FACULTY OF COMMERCE, MANAGEMENT AND LAW
OLD CURRICULUM MODULES
Figure 5: Info-Tutorials on Moodle
Indicated in Figure 4 above, the Distance Student Orientation provides video tutorials on various activities you
would perform such as submitting your assignments, converting your documents into pdf format, changing
your email address, how to check your results when assignments have been graded and so on.
Updates and information with regard to your studies and related events would be shared in the Distance
Education Common Space which you can access from any course as shown in screenshot below. All students
studying on distance mode are linked this the space where you can collaborate or discuss general issues.
Figure 6: Distance Education Common Space
You will also find the Student Information Letter, your Vacation School Timetable and User Guides in the
Distance Education Common Space.
13. Staff Contact Information
If you study conscientiously, your efforts will be rewarded. Should you need any assistance or clarification on
the module contents, you can reach the relevant staff members at the contact details as given below:
Tutor:
For Module/Subject content related matters,
Assignments marks and CA marks queries
Alfred Makosa
0612063810
amakosa@unam.na
Student Support Coordinator:
Ms. Anna-Marie Murere
0612063729
amurere@unam.na
Faculty officers:
Ms T Nuuyoma
0612063609
tnuuyoma@unam.na
061-2064881
mrkangootui@unam.na
061-2063715
snehoja@unam.na
Mr Owen Lisulo
0612063381
olisulo@unam.na
Mr Shaka Maikhudumu
0612063000
smaikhudumu@unam.na
Margareth-Rose Kangootui
Examination Officers:
Stephanie Nehoja (WHK)
For Exam marks and exam timetable, exam
related matters
All exam officers at respective
campuses assist students of those
campuses
eLearning Administrator:
Page 9 of 19
FACULTY OF COMMERCE, MANAGEMENT AND LAW
OLD CURRICULUM MODULES
Moodle related queries (technical problems),
linking of Modules, etc.
https://elearning.unam.edu.na/sup
port/open.php
Please create an online ticket for any assistance
NOTE: For additional information consult the Prospectus and UNAM General Information and Regulations
Prospectus.
Page 10 of 19
FACULTY OF COMMERCE, MANAGEMENT AND LAW
OLD CURRICULUM MODULES
Serious offence not tolerated at all
Note well: Plagiarism
Plagiarism is “the wrongful appropriation or purloining, and publication as one’s own, of the ideas, or the expression of
the ideas of another” (OED). All published and unpublished material, whether in manuscript, printed or electronic form,
is covered under this description.
The Proctors’ Disciplinary Regulations concerning conduct in examinations (see Part 19.4. and 19.5, p. 52) state that
‘No candidate shall present for an examination as his or her own work any part of the substance of another person’s
work. In any written work (whether thesis, dissertation, essay, coursework, or written examination, or assignment)
passages quoted or closely paraphrased from another person’s work must be identified as quotations or paraphrases, and
the source of the quoted or paraphrased material must be clearly acknowledged.’ In all written work students must be
vigilant in citing the work they have referred to or quoted from (please see further Appendix D). Examples of plagiarism
and detailed advice as to how to avoid it are given on http://www.admin.ox.ac.uk/edc/goodpractice/: you are strongly
advised to consult this website.
It has been observed that some students merely download information from the Internet, copy verbatim from other printed
sources (including the Study Guide, employ other people to do their assignments for them, or plagiarise each other’s
assignments (either directly, that is, word-to-word, or through a re-arrangement of words or paragraphs in order to
deceive the tutor or marker).
These practices constitute very serious academic offences of academic dishonesty, alternatively, intellectual fraud, which
attract very serious and heavy penalties. Students must desist from such practices. Such students may score very high
marks but invariably perform very poorly in examinations. It is in the interest of such students to endeavour to exercise
their own intellectual faculties, do their own research, and personally do the set assignments.
No hardcopies are allowed, all assignment are to be uploaded through Moodle.
 Assignments should be submitted in PDF – only. Kindly save your assignments in PDF format
 Make sure that you submit one assignment as one file/document. Do not create and upload
several folders; do not zip the documents. Have 1 one document/file for 1 (ONE) entire
assignment.
 Assignments for modules with formulas can be handwritten, scanned in one document and
uploaded on Moodle accordingly.
 Make sure you submit a document that is readable and virus free.
 Make sure you upload the right file with the relevant assignment content.
 After submitting your assignment on Moodle do verify on the file you uploaded. Always try to
submit your assignment few days before the due date, this allows you to double-check all the
nitty-gritties.
NO LATE SUBMISSIONS WILL BE TOLERATED. NO LATE submission due to not adhering to the above
advises or guidance WILL BE ACCEPTED nor ENTERTAINED.
Page 11 of 19
FACULTY OF COMMERCE, MANAGEMENT AND LAW
OLD CURRICULUM MODULES
2023 AAM3691 Assignment Questions
Assignment 1
Question 1
(14 marks)
Velukoshi Shoes is a company that produces high quality footwear. The company distributes their
products into markets within Namibian towns and neighboring country. In 2023, the plan to
manufacture 9 800 units of one of their premium brands. The following information relates to this
premium brand:
N$
520 000
256 000
190 000
525 000
401 000
204 000
102 000
Direct materials
Direct labour
Indirect labour (40% fixed)
Variable overheads
Fixed production overheads
Selling and distribution overheads
Administration
REQUIRED:
Calculate the following
1.1 Prime cost
1.2 Variable production cost
1.3 Conversion cost
1.4 Total production cost
1.5 Period cost
1.6 Fixed cost per unit
1.7 Total variable cost when 10 000 units are produced
Total
QUESTION 2
MARKS
2
2
2
2
2
2
2
14
(25 MARKS)
Question 2.1
Sewing industries is a factory located in Divundu that specialises in assembling mini-sewing
electrical machines which are portable and which can be used in close proximity.
The business has provided you with financial data for the year ended 31 January 2022 extracted
from their books.
N$
600 000
400 000
300 000
336 000
224 000
140 000
2 500 000
Cost of components
Wages for workers assembling
Factory overheads
Administration
Selling expenses
Distribution charges
Sales
Page 12 of 19
FACULTY OF COMMERCE, MANAGEMENT AND LAW
OLD CURRICULUM MODULES
The factory produced 10 000 mini-sewing electric machines in the period ended 31 January 2023.
The following additional information is given:
1) The following items will occur based on previous years’ figure:
(i) The price of materials will increase by 20%.
(ii) Wages will increase by 10%
(iii) Manufacturing expense will increase in proportion to the combined cost materials and
wages.
2) Other expenses will remain unchanged.
3) Once the assembly has been complete the sales department expects the mini-sewing
electrical machines to be transferred at a margin of 20% on sales from the factory.
REQUIRED:
MARKS
2.1
7
Prepare a schedule of cost of goods assembled.
Question 2.2
The following data relate to the overhead expenditure of a contractor who undertakes industrial
repairs and maintenance for the first six months in 2022
Month
Maintenance cost-N$
Maintenance hours
Jan
630
7 950
Feb
500
7 400
Mar
700
8 280
April
550
7 630
May
780
9 100
Jun
800
9 800
Where there are more than 1 000 hours incurred in maintenance, it is necessary for the business to
employ an additional supervisor at any site at an extra fixed cost of N$ 5 575.
REQUIRED:
MARKS
Using least squares approach determine the cost function for the maintenance
cost.
Ʃxy = aƩx + bƩx² ……………(i)
2.2.1
11
Ʃy = na + bƩx………………….(ii)
Note: You are not obliged to use the simultaneous equation approach.
Any other approach is acceptable.
Using your answer to 2.2.1 calculate the total cost at 1 200 Maintenance
hours.
Using the high-low method, determine the cost function for the maintenance
2.2.3
cost.
Total marks
18
TOTAL MARKS QUESTION 2:
25
2.2.2
Page 13 of 19
2
5
FACULTY OF COMMERCE, MANAGEMENT AND LAW
OLD CURRICULUM MODULES
QUESTION 3
(21 MARKS)
ABC Ltd is planning to launch a new product and budgets to use an annual 54 560 units of a special
material for production. The material will be used during the year at an even rate. The purchasing
manager has decided he is going to place orders for 1 760 units at regular intervals during the year.
The costs associated with the material are as follows:
1. Purchase price N$ 3.84 per unit.
2. Ordering costs N$ 6.40 per order.
3. Holding costs per unit are 20% of the purchase price.
REQUIRED:
3.1
Based on the 1 760 units calculate the annual ordering cost
MARKS
2
3.2
Based on the 1 760 units calculate the annual holding costs
2
3.3
Calculate the Economic Order Quantity and explain what it means
6
3.4
3.5
Calculate the difference in the ordering and holding costs between the order
quantities suggested by the purchasing manager and the units you computed
in 3.3.
The supplier is keen to encourage ABC Ltd. to order in bulk and has offered
a discount of 10% on all purchases for an order quantity of 6 400 units.
(Assume the order quantity prior to the discount offer is the amount
calculated using the EOQ as calculated in part 3.3 above).
4
7
Advise whether or not this discount is financially beneficial to ABC Ltd.
TOTAL MARKS FOR QUESTION 3
21
QUESTION 4
(15 MARKS)
Ndama electronics is a business that was established in Rundu by two ambitious UNAM engineering
graduates to build mass-produced karts. To build the karts, 5 skilled workmen working a standard
40-hour week are required. Production has only just started with the workforce, who are Rundu VTC
graduates, keen to learn quickly.
When the first kart was built unfortunately; the time taken was not recorded. However, they did
record the time used to produce the third unit and the average time for all units at that point was
11.36 hours. Based on previous knowledge, the two UNAM graduates believe that there is a 70%
learning rate of the new workmen.
REQUIRED:
4.1 Calculate the time taken for the first kart?
4.2 Calculate the total time taken for the 12th kart only?
4.3 Calculate the total time for the 19th to the 20th kart only?
Page 14 of 19
MARKS
3
5
5
FACULTY OF COMMERCE, MANAGEMENT AND LAW
OLD CURRICULUM MODULES
4.4
State any two limitations of learning curves
Total marks
Total Assignment 1: 75 marks
Page 15 of 19
2
15
FACULTY OF COMMERCE, MANAGEMENT AND LAW
OLD CURRICULUM MODULES
Assignment 2
QUESTION 1
(28 MARKS)
1.1 The production manager of Grim (Pty) Ltd has recently attended a management course where
the advantages of variance analysis were discussed. He feels such an analysis would assist in
solving problems of budgetary control that arose during the year. The following information relates
to the past year’s (year ending 31 May 2022) activities:
Actual manufacturing overheads
Actual direct labour hours
Budgeted manufacturing overheads
Actual sales
Budgeted direct labour hours
Actual profit for the year
N$175 000.00
25 000 hours
N$125 000.00
N$600 000.00
20 000 hours
N$185 000.00
REQUIRED:
MARKS
1.1.1 Calculate the predetermined overhead rate.
2
1.1.2 Calculate overheads over- or under-absorbed.
4
Total Mark for question 1.1
6
1.2. The following overheads have been budgeted for and must be allocated to the production and
service departments.
Rent of factory building
N$120 000.00
Electricity
N$ 76 500.00
Insurance on machinery
N$ 60 000.00
Protective clothing
N$ 24 000.00
Secondary allocation is done on the basis of direct labour hours.
The following statistics is available:
Department A
Number of employees
Floor space
Value of machinery
35
500 m
Department B
20
2
400 m
Service Department
5
2
100 m2
N$500 000.00
N$800 000.00
N$200 000.00
Kilowatt hours
400
400
50
Labour hours
400
225
95
Page 16 of 19
FACULTY OF COMMERCE, MANAGEMENT AND LAW
OLD CURRICULUM MODULES
REQUIRED:
MARKS
1.2.1 Draw up an overhead statement and show the primary as well as the secondary
allocations.
19
1.2.2 Calculate the absorption rate per department using labour hours as basis.
3
Total Mark for question 1.2
Total mark for Question 1
22
QUESTION 2
(21 MARKS)
Company X is preparing a job cost estimate that will be used to provide a quote for a potential
customer. Estimated costs for the job are to be based on the following:
Direct materials
Direct labour
N$2 893
210 hours at a basic rate of N$8.00 per hour
Direct production staff also receive a bonus each period. The bonus is paid on actual hours worked
at a rate per hour calculated using the following formula: {[(time allowed – time worked) ÷ time
allowed] × basic rate per hour}
The bonus to be included currently in the costing of all jobs is based on the following estimates for
the period: Total time worked 3 400 labour hours, Total time allowed 4 000 labour hours
Production overheads Absorbed at 20% of prime cost (including labour bonus) + N$9·00 per direct
labour hour
Non-production overheads are absorbed at 25% of total production cost
Quoted prices are calculated to provide Company X with a net profit margin of 20% of sales.
REQUIRED:
MARKS
2.1.1 Calculate the total estimated PRODUCTION cost of the job.
9
2.1.2 Calculate the price that should be quoted for the job
Total Mark for question 2.1
6
2.2. Zita Ltd has supplied the following data concerning one of its contracts:
Contract price
N$200 000
Page 17 of 19
15
FACULTY OF COMMERCE, MANAGEMENT AND LAW
OLD CURRICULUM MODULES
Cost incurred to date
N$115 000
Estimated cost to complete the contract
N$ 37 000
Value of work certified by architect
N$120 000
Progress payments received from client
N$100 000
Cost of work certified
N$ 84 000
REQUIRED:
MARKS
2.2.1 Calculate what amount of profit should be taken on the contract using the work
certified method.
3
2.2.2 Calculate what amount of profit should be taken on the contract using the
percentage completion method.
3
Total Mark for question 2.2
6
QUESTION 3
(26 MARKS)
Alpha Ltd produces two products: A and B. The company produces both products with the same
equipment. Product B is a high volume product while product A is produced in low volumes. Details
of cost of activities, inputs, and output are as follows:
Overhead cost analysis
N$
Material handling
150 000
Material procurement
50 000
Set-up
150 000
Quality control
250 000
Production
600 000
Cost driver analysis
Overhead
Cost driver
Product A
Material handling
Material movements
100
50
Material procurement
Number of orders
200
100
Set-ups
Number of set-ups
60
40
Quality control
Number of inspections
150
100
Production
Direct labour hours
40 000
10 000
Annual output
Product A: 80 000 units
-
-
Page 18 of 19
Product B
FACULTY OF COMMERCE, MANAGEMENT AND LAW
OLD CURRICULUM MODULES
Product B: 20 000 units
-
-
The production manager has recently attended a workshop on cost reduction measures. One of the
topics that featured prominently in the workshop was the importance of using Activity Based Costing
(ABC) over the traditional absorption costing system.
REQUIRED: The production manager has requested you to assist with the MARKS
following:
6
3.1.
To determine the overhead cost per product using a traditional absorption
costing system.
18
3.2.
To determine the overhead cost per product using ABC system.
2
3.3.
How does the use of ABC system affect your answers obtained earlier in
(3.1.)?
TOTAL MARKS FOR QUESTION 3
26
Total Assignment 2: 75 marks
Page 19 of 19