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BAC621C-BUSINESS ACCOUNTING 2B- 1ST OPP- JUNE 2025 |
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nAmlBIA
unlVERSITY
OF SCIEnCE Ano
TECHnOLOGY
HP-6S84 :
HAROLDPUPKEWITZ
GraduateSchoolof Business
FACULTY OF COMMERCE, HUMAN SCIENCESAND EDUCATION
HAROLDPUPKEWITZGRADUATESCHOOLOF BUSINESS
QUALIFICATION: DIPLOMA IN BUSINESSPROCESSMANAGEMENT
QUALIFICATIONCODE:06DBPM LEVEL:6
COURSECODE: BAC621C
COURSENAME: BUSINESSACCOUNTING2B
SESSION:JUNE 2025
PAPER:PAPER1
DURATION: 3 HOURS
MARKS: 100
EXAMINER
FIRST OPPORTUNITY EXAMINATION QUESTION PAPER
Gerhardt Sheehama
MODERATOR Lameck Odada
INSTRUCTIONS
1. This question paper is made up of four (4) questions.
2. Answer ALLthe 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.
PERMISSIBLEMATERIALS
Silent, non-programmable calculators
THIS QUESTION PAPERCONSISTSOF 6 PAGES(including this front page}
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QUESTION1
(10 MARKS}
Each of the following questions has only ONE correct answer. In your answer script, write down the numbers
1.1 to 1.5 in the provided answer scripts. Then, next to each number only write down the letter which in your
opinion, represents the correct answer.
1.1 The Ship Company is planning to produce single product. Sales are estimated at 10 000 units at N$400 per
unit. Variable costs are 70% of sales. Estimated fixed costs amount to N$150 000. The break-even point in
units for the Ship Company is:
a) 1 375 units
b) 1 500 units
c) 1 275 units
d) 1 250 units
1.2 The Ship Company is planning to produce single product. Sales are estimated at 10 000 units at N$400 per
unit. Variable costs are 70% of sales. Estimated fixed costs amount to N$150 000. The break-even point in
value (N$) for the Ship Company is:
a) N$500 000
b) N$550 000
c} N$500 000
d) N$510 000
1.3 Lastyear, Black Company reported salesof N$640 000, a contribution margin of N$160 000, and a net loss
of N$40 000. Based on this information, total fixed cost was:
a} N$400000
b) N$200 000
. c) N$160 000
d) N$120 000
1.4 Break-even analysis assumes that:
a) total costs are unchanged
b) unit fixed expenses are unchanged
c) variable expenses are non-linear
d) unit variable expenses are unchanged
1.5 Corrie Ltd sells Product K for N$360 per unit while the variable costs amount to N$198 per unit. The
annual fixed cost of the company is N$207 000. In order to show a net income of N$45 000 per year, the
sales revenue should amount to:
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a) N$320 000
b) N$468 000
c) N$512 000
d) N$560 000
QUESTION 2
[22 MARKS]
Match the terms and concepts to the appropriate defining details, formula, or example in the right column to left
column below. Provide your answers by only giving the number and corresponding letter.
Terms and Concepts
Defining details, formula, or example
1. Budget
a) A process of involving the steps taken by management to ensure that
the objectives set down at the planning stage are attained.
2. Planning
b) A process of budgeting where the previous period's results are used
as basis for the budget
3. Control
c) A budget that deals with cash flows only.
4. Zero-base budgeting
5. Incremental budgeting
d) A process of involving developing objectives and preparing various
budgets to achieve these objectives.
e) Area of responsibility for sales budget
6. Strategic budget
f) Projected sales plus desired closing inventory less opening inventory.
7. Sales manager
g) A summary of all individual functional budgets.
8. Production budget
h) A continuous budget
9. Master budget
10. Rolling budget
11. Cash budget
i) A detailed plan for the acquisition and use of other financial sources
over a specified time period.
j) A budget that is prepared from "scratch."
k) Long term budget
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QUESTION 3
[22 MARKS]
Nam-Dairy Ltd operates a dairy manufacturing business called Sweet-Dairy. The company produces variants of
organic cream. The best-selling organic cream ice cream is Strawberry Glaze, of which the sales have more than
tripled during the last six months.
The following information relates to the production of Strawberry Glaze.
The two main ingredients required to produce Strawberry Glaze are organic milk and organic mixed berries. The
forecasted salesfigure for Strawberry Glaze is 1600 units at N$400 each. Eachof unit of Strawberry Glaze requires
5 litres of organic milk and 4 kg of organic mixed berries to produce. The company accountant calculated the cost
of organic milk to be N$20 per litre. In addition, the organic mixed berries are purchased at N$15 per kg. The price
of organic mixed berries is expected to increase to N$25 per kg in April 2025.
The company's manufacturing process is 90% machine intensive. Therefore, the company employs workers only
to package the final product. It takes 1 hour and 30 minutes to package the final product. These workers are
remunerated at N$30 per hour.
The inventory levels for the month of March 2025 are:
1 March 2025
31 March 2025
Strawberry Glaze
400 units
700 units
Organic milk
5 600 litres
4 500 litres
Organic mixed berries
3 000 kg
3 600 kg
REQUIRED:Draft the following budgets for the month of March 2025:
a) Sales budget
b) Production budget
c) Direct materials purchases budget
d) Direct labour budget
MARKS
3
4
12
3
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QUESTION 4
[25 MARKS]
Robb Pie is an engineering company that repairs machinery and manufactures replacement parts for machinery
used in the building industry. There are a number of different departments in the company including a foundry, a
grinding department, a milling department and a general machining department. Robb Pie prepared its budget
for the year ending 31 December 2024 using an incremental budgeting system.
The budget is set centrally and is then communicated to each of the managers who have responsibility for
achieving their respective targets. The following report has been produced for the general machining department
for December 2024:
Number of machine hours
Cleaning materials
Steel
Other direct materials
Direct labour
Production overheads
Totals
Budget
9 000
-1iS.
135000
450 000
45 000
290 000
300 000
1220 000
Actual
11320
_M
174 000
560 000
70000
324 000
426 000
1554 000
Variance
2 320 (F)
N$
39 000 (A)
110 000 (A)
25 000 (A)
34 000 (A)
126 000 {Al
334 000 (A)
The manager of the general machining department has received a memo from the Financial Controller requiring
him to explain the serious overspending within his department. The manager has sought your help and, after some
discussion, you have ascertained the following:
• The cleaning materials, steel and other direct materials vary in proportion to the number of machine
hours.
• The budgeted direct labour costs include fixed salary costs of N$42 500; the balance is variable in
proportion to the number of machine hours.
• The production overhead costs include a variable cost that is constant per machine hour at all activity
levels, and a stepped fixed cost which changes when the activity level exceeds 10 000 machine hours. A
further analysis of this cost is shown below:
Activity (machine hours)
Costs (N$)
2 000
140 000
7 000
245 000
14000
458 000
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REQUIREMENTS:
(a) Prepare a revised budgetary control statement using the additional information that you are provided (15
(b) Discusssome of the major benefits to be gained from budgeting.
(10)
QUESTION 5
(21 MARKS)
Endelela-Twiye Shoe Company operates a chain of shoe stores. The stores sell ten different styles of inexpensive
men's shoes with identical unit costs and selling prices. A unit is defined as one pair of shoes.
Each store has a store manager who is paid a fixed salary. During the current month the stores sold 4 500 pair of
shoes. Endelela-Twiye Shoe Company is trying to determine the desirability of opening another store and provided
the following relevant information:
Selling price per pair of shoes
NS.
120
Purchase cost per pair of shoes
84
Fixed rent expense per annum
24000
Fixed salary per annum
120 000
REQUIRED:
(a) Calculate the annual break-even point in units and value (N$).
(6)
(b) Calculate the margin of safety ratio(%)
(5)
(c) Outline five important assumptions underlying the cost-volume-profit analysis.
(10)
END OF EXAMINATION PAPER
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