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BAC621C-BUSINESS ACCOUNTING 2B-2ND OPP-JULY 2025 |
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nAmlBIA
UntVERSITY
OF SCIEnCEAno
TECHnOLOGY
HP-GSB
HAROLDPUPKEWITZ
GraduateSchoolof Business
FACULTY OF COMMERCE, HUMAN SCIENCESAND EDUCATION
HAROLD PUPKEWITZ GRADUATE SCHOOL OF BUSINESS
QUALIFICATION: DIPLOMA IN BUSINESSPROCESSMANAGEMENT
QUALIFICATION CODE: 06DBPM LEVEL: 6
COURSE CODE: BAC621C
COURSE NAME: BUSINESSACCOUNTING 2B
SESSION: JULY2025
PAPER: PAPER2
DURATION: 3 HOURS
MARKS: 100
SECOND OPPORTUNITY EXAMINATION QUESTION PAPER
EXAMINER
Gerhardt Sheehama
MODERATOR Lameck Odada
INSTRUCTIONS
1. This question paper is made up of four (4) questions.
2. Answer ALL the questions in blue or black ink only. NO pencil
3. Start each question on a new page in your answer booklet and show all workings.
4. Round off only final answers to two (2) decimal places unless otherwise stated.
5. Questions relating to this examination may be raised in the initial 30 minutes after the
start of the paper. Thereafter, candidates must use their initiative to deal with any
perceived error or ambiguities & any assumption made by the candidate should be
clearly stated.
PERMISSIBLE MATERIALS
Silent, non-programmable calculators
THIS QUESTION PAPER CONSISTS OF 10 PAGES (including this front page)
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QUESTION 1
{28 Marks)
Answer this question ON the Answer Sheet on Page 8 of this question paper.
In each of the following questions, ON THE PROVIDED ANSWER SHEET,only write down the letter that, in your
opinion, represents the correct answer:
1. New - Life Ltd has a maximum capacity of 15 000 units of a certain product per year. Other details
regarding this product are as follows:
Sales (selling price per unit N$50)
N$225 000
Contribution margin per unit
N$20
Fixed costs
N$52 500 per year
The number of units to be sold to earn a target net income of N$15 500 is:
A.
2 625
B.
4 500
C.
3 400
D.
3 500
2. New - Life Ltd has a maximum capacity of 15 000 units of a certain product per year. Other details
regarding this product are as follows:
Sales (selling price per unit N$50)
N$225 000
Contribution margin per unit
N$20
Fixed costs
N$52 500 per year
Break-even point in N$ is:
A.
N$131250
B.
N$130 250
C.
N$130 500
D.
N$131500
3. New - Life Ltd has a maximum capacity of 15 000 units of a certain product per year. Other details
regarding this product are as follows:
Sales (selling price per unit N$50)
N$225 000
Contribution margin per unit
N$20
Fixed costs
N$52 500 per year
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The number of units New-Tura Ltd should sell to break-even are:
A.
2 525
B.
2 565
C.
2 600
D.
2 625
4. New - Life Ltd has a maximum capacity of 15 000 units of a certain product per year. Other details
regarding this product are as follows:
Sales (selling price per unit N$50)
N$225 000
Contribution margin per unit
N$20
Fixed costs
N$52 500 per year
Variable cost ratio to sales is:
A.
100%
B.
60%
C.
40%
D.
25%
5. New - Life Ltd has a maximum capacity of 15 000 units of a certain product per year. Other details
regarding this product are as follows:
Sales (selling price per unit N$50)
N$225 000
Contribution margin per unit
N$20
Fixed costs
N$52 500 per year
Contribution margin ratio to sales is:
A.
40%
B.
60%
C.
50%
D.
100%
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6. New - Life Ltd has a maximum capacity of 15 000 units of a certain product per year. Other details
regarding this product are as follows:
Sales (selling price per unit N$50)
N$225 000
Contribution margin per unit
N$20
Fixed costs
N$52 500 per year
Number of units sold during the period are:
A.
15 000
B.
4 500
C.
5 400
D.
3 500
7. Fast-But-Sure Ltd. makes a high-quality wooden birdhouse; and during the month of May 2022 there were
4 000 units sold. The firm had generated a revenue of N$180 000, during the month of May 2022.
Contribution margin ratio to sales is 40%, and fixed costs total N$50 000 per month.
Break-even point in N$ is:
A.
N$150 000
B.
N$180 000
C.
N$125 000
D.
N$145 000
8. Fast-But-Sure Ltd. makes a high-quality wooden birdhouse; and during the month of May 2022 there were
4 000 units sold. The firm had generated a revenue of N$180 000, during the month of May 2022.
Contribution margin ratio to sales is 40%, and fixed costs total N$45 000 per month.
Break-even point in units are:
A.
2 500
B.
2 000
C.
3 000
D.
4 500
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9. Nawa CCproduces and sells only one product. The following budgeted data is available:
Inventory levels (2022)
1 May
31 May
Raw material (kilograms)
2 000
1 200
Finished products (units)
????
1 500
Salessold 3 600 units at N$150 per unit
Production units 3 800
The units of opening inventory (finished goods) are .....
A.
2 000
B.
1000
C.
1 500
D.
1300
10. Wana CCproduces and sells only one product. The following budgeted data is available:
Inventory levels (2022)
1 June
31 June
Raw material (kilograms)
2 000
1 000
Finished products (units)
1000
1200
Budgeted sales 3 800 units
The budgeted production in units are .....
A.
4 000
B.
4 500
C.
5 300
D.
4 300
11. Standard direct materials are 10kg at N$300 per kg; and actual direct materials are12kg at N$250 per kg.
Budgeted production units and actual production units are 600 units and 500 units, respectively.
The direct material price variance is .....
A.
N$25 000 (F)
B.
N$35 500 (F)
C.
N$25 000 (A)
D.
N$25 500 (A)
12. The following data relates to the Assembly Department of Katutura Manufacturer Limited:
Standard direct materials are 10kg at N$30 per kg; and actual direct materials are12kg at N$25 per kg.
Budgeted production units and actual production units are 600 units and 500 units, respectively.
The actual direct materials (kgs) used in production process are .....
A.
6 800
B.
6 000
C.
6 500
D.
6 200
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13. The following data relates to the Assembly Department of Katutura Manufacturer Limited:
Standard direct materials are 5kg at N$30 per kg; and actual total direct materials are 3 000kg at N$25 per
kg.. Budgeted production units and actual production units are 600 units and 500 units, respectively. The
direct material usage variance is....
A.
N$15 500 (A)
B.
N$15 000 (F)
C.
N$12 500 (F)
D.
N$15 000 (A)
14. Vinia CCproduces and sells only one product.
The following information is available
Standard cost:
Direct Labour
2 hours per unit @ N$20 per hour
Actual direct labour production:
Direct labour cost
N$275 000
Direct labour rate per hour N$25
Actual production units 15 000
The actual direct labour hours are.....
A.
12 000
B.
12 500
C.
11 000
D.
11500
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QUESTION 2
(20 Marks)
1.1 Explain what you understand by the term "internal rate of return".
(2)
2.2 Explain two reasons why you would not recommend the payback method as a good technique
for the evaluation of a capital investment.
(4)
2.3 The management of Wetland Ltd expects a return of at least 14% on all capital investments. The
company presently considers investing in a new machine.
Forecasts relating to this machine are as follows:
Purchase price
Estimated economic life
Annual cash inflows:
End of year 1
2
3
4
N$400 000
3 years
N$150 000
N$225 000
N$180 000
N$100 000
REQUIRED:
Make a recommendation to the management of Wetland as to the viability of investing in
this new machine. Use Net Present Value (NPV) method.
(14)
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QUESTION 3
[27 MARKS)
Fragrance Ltd manufactures perfume. Perfume is sold in bottles of 100 ml. The standard cost per unit is given
below:
Direct material 0.1 litre @ N$520 per litre
Direct labour 1.5 hour @ N$60 per hour
Variable manufacturing overheads @ N$6 per direct labour
The selling price per 100 ml bottle is N$320. Fragrance Ltd expected to manufacture and sell 1 500 bottles of
perfume during the period. Actual information is given below:
Direct material price
Direct material used in production
Direct labour rate
Direct labour hours
Variable manufacturing rate
manufactured
N$525 per litre
153 litres
N$61
2 224
N$4
1 390 bottles of
perfume were
REQUIRED: Calculate the following variances:
a) Material price variance
b) Material usage variance
c) Material total variance
d) Labour rate variance
e) Labour efficiency variance
f) Labour total variance
g) Variable overhead expenditure variance
h) Variable overhead efficiency variance
i) Variable overhead total variance
(3 marks each)
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QUESTION 4
(25 Marks}
P Care CC.is a specialist laboratory carrying out tests on blood samples. At present, the laboratory carries out 10
000 tests each period.
You are the newly appointed junior management accountant for P Care, and you have been informed that the
organisation wants to increase its tests by 6 000 tests a period. An independent marketing research firm has been
consulted to do a feasibility study.
The current cost of carrying up a full test is:
Material
Technician's wages
Variable overhead
Fixed overhead
120
40
12
400 000
The findings of the feasibility study revealed the following;
i)
Variable overhead costs will increase by N$2 per test
ii)
Quantity discount of 10% will be given for all materials if an order is placed to cover 16 000 tests
iii)
Additional premises should be rented for N$600 000 per period
iv)
The fee per test will be increased by 20%.
The current fee per test is N$300
Requirements:
a) Calculate the current break-even point in units and in sales value
(4 marks)
b) Calculate the margin of safety ratio
(2 marks)
c) Comment on the ratio you have calculated in question (b) above
(2 marks)
d) Prepare a profit statement for the current 10 000 capacity
(5 marks)
e) Prepare a profit statement if the new proposal has been adopted and 16 000 tests were to be carried out. (9)
f) Comment on whether the new proposal of carrying the additional 6 000 tests should be adopted. (1 mark)
g) In your opinion state 2 (two) factors other than the calculation that should be considered before any decision
is taken.
(2 marks)
END OF EXAMINATION PAPER
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APPENDIXTABLE1
Present Value Tables
Number
Interest Rate per Year
of Years 1%
2%
3%
4%
5%
6%
7%
8%
9% 10% 11% 12% 13% 14% 15%
1 .990 .980 .971 .962 .952 .943 .935 .926 .917 .909 .901 .893 .885 .877 .870
2 .980 .961 .943 .925 .907 .890 .873 .857 .842 .826 .812 .797 .783 .769 .756
3 .971 .942 .915 .889 .864 .840 .816 .794 .772 .751 .731 .712 .693 .675 .658
4 .961 .924 .888 .855 .823 .792 .763 .735 .708 .683 .659 .636 .613 .592 .572
5 .951 .906 .863 .822 .784 .747 .713 .681 .650 .621 .593 .567 .543 .519 .497
6 .942 .888 .837 .790 .746 .705 .666 .630 .596 .564 .535 .507 .480 .456 .432
7 .933 .871 .813 .760 .711 .665 .623 .583 .547 .513 .482 .452 .425 .400 .376
8 .923 .853 .789 .731 .677 .627 .582 .540 .502 .467 .434 .404 .376 .351 .327
9 .914 .837 .766 .703 .645 .592 .544 .500 .460 .424 .391 .361 .333 .308 .284
10 .905 .820 .744 .676 .614 .558 .508 .463 .422 .386 .352 .322 .295 .270 .247
11 .896 .804 .722 .650 .585 .527 .475 .429 .388 .350 .317 .287 .261 .237 .215
12 .887 .788 .701 .625 .557 .497 .444 .397 .356 .319 .286 .257 .231 .208 .187
13 .879 .773 .681 .601 .530 .469 .415 .368 .326 .290 .258 .229 .204 .182 .163
14 .870 .758 .661 .577 .505 .442 .388 .340 .299 .263 .232 .205 .181 .160 .141
15 .861 .743 .642 .555 .481 .417 .362 .315 .275 .239 .209 .183 .160 .140 .123
16 .853 .728 .623 .534 .458 .394 .339 .292 .252 .218 .188 .163 .141 .123 .107
17 .844 .714 .605 .513 .436 .371 .317 .270 .231 .198 .170 .146 .125 .108 .093
18 .836 .700 .587 .494 .416 .350 .296 .250 .212 .180 .153 .130 .111 .095 .081
19 .828 .686 .570 .475 .396 .331 .277 .232 .194 .164 .138 .116 .098 .083 .070
20 .820 .673 .554 .456 .377 .312 .258 .215 .178 .149 .124 .104 .087 .073 .061
Discountfactors: Present valueof $1 to be receivedafter t years= 1/(1 + r)1.
Note:Forexample,if the interestrateis 10% peryear,the presentvalueof $1 receivedat year5 is $.621.
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