FACULTY OF COMMERCE,

MANAGEMENT & LAW

DISTANCE MODE ASSIGNMENT
LETTER

Academic Year 2023

Semester (2)
[Management Accounting 1B-
AAM3692]

A MUST, TO READ THE ENTIRE

DOCUMENT

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ACCOUNTING, ECONOMIC & MANAGEMENT

SCIENCES

ASSIGNMENT ADMINISTRATION
DISTANCE AND ONLINE COURSES – 2023
SEMESTER 2
MONTH DATES ACTIVITIES Schools

July 19 July Semester 2 Commences

August 21-25 August 2023 Compulsory Virtual Vacation School All Schools

FIRST ASSESSMENT:2nd SEMESTER MODULES

29 August Due date: 01st Assessment of 2nd Semester Modules Only School of Accounting, School of Business
30 Aug-1 Sept Grace Period for assessment submission/ completion Management, Governance & Economics
School of Law

MAKE-UP/ COMPENSATORY ASSESSMENT 1: 2nd SEMESTER MODULES

September
20 September 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.
School of Accounting, School of Business
Management, Governance & Economics
School of Law

SECOND ASSESSMENT: 2nd SEMESTER MODULES

September
18 Sept Due date: 02nd Assessment of 2nd Semester Modules Only School of Accounting, School of Business
19-21 Sept Grace Period for assessment submission/ completion Management, Governance & Economics
School of Law
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MAKE-UP/ COMPENSATORY ASSESSMENT 2: 2nd SEMESTER MODULES

4 October Make-up assessment due date: 2nd Assessment School of Accounting, School of Business
October – Only applicable if you score 1-39% in Assignment 2. Management, Governance & Economics
Take note that a new assessment (test or assignment) is School of Law
to be submitted.
13 October Lectures end for First Semester
Release of CA marks
18 October Examination commences All Schools
12 January 2024 University reopens

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!

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2023 Distance Mode Assignments

[Management Accounting 1B- AAM3692 ]
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.
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:

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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 2023 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.
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

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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. Conditions under which late submissions will be granted/ accepted

Medical and death are the only reasons accepted for the late submission of
assignments. Late submission of assignments will only be approved 7 days
(including public holidays and weekends) after the due date of an
assignment. Valid documentary proof must be attached as part of the assignment
before any late submission will be considered. Late submission without valid

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documentary proof attached to the assignment will be returned unmarked and

may not be resubmitted for marking. Travelling and attendance of workshops,
job related activities and conferences may not be used as an excuse for the late
submission of assignments.

Sick leave certificates should be submitted within 7 days from the time you
happened to be booked off. For example, if you become sick and booked off on the
day you visit the doctor, then the medical certificate should be submitted via the
online ticketing system to the respective Distance Education Officer within 7 days
(including weekends and public holidays). Any medical certificate submitted after 7
days cannot be entertained. Any medical certificate dated during the grace
period will not be considered. The grace period is not regarded as an assignment
submission due date, but rather additional days provided to each student to submit
or amend already submitted assignment (s).

Medical certificates submitted after the end date of the sick leave cannot be
entertained.

9. 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 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.

10. Vacation schools

Attending vacation school is COMPULSORY and the vacation school timetable will be made
available through the UNAM Moodle, on the Distance Education Common Space.

11. 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.

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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.

12. 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.
13. 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.

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.

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14. 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, Mr Makosa 0612063810 amakosa@unam.na
Assignments marks and CA marks queries
Student Support Coordinator: Ms. Anna-Marie Murere 0612063729 amurere@unam.na
Ms Nelago 0612063987 onelago@unam.na
Faculty officers: Ms T Nuuyoma 0612063609 tnuuyoma@unam.na
Ms G Van Wyk 0612063084 gvanwyk@unam.na
061-2064881

Examination Officers: 061-2063715 snehoja@unam.na

Stephanie Nehoja (WHK)
For Exam marks and exam timetable, exam All exam officers at respective
related matters campuses assist students of those
campuses

eLearning Administrator: Mr Owen Lisulo 0612063381 olisulo@unam.na

Moodle related queries (technical problems), Mr Shaka Maikhudumu 0612063000 smaikhudumu@unam.na

linking of Modules, etc.
https://elearning.unam.edu.na/sup
Please create an online ticket for any assistance port/open.php

NOTE: For additional information consult the Prospectus and UNAM General Information and
Regulations Prospectus.

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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.

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2023 Management Accounting 1B Assignment Questions
Assignment 1
Question 1 (23 Marks)
Windhoek Traders (WT) was formed on the 1 March 2022. The company produces one
product known as the Product W. The following information relates to the planned operations
for the 2023 financial period:

Forecast for the Year ended 28 February 2023

TOTAL
N$
Sales (90 000 units) 1 010 000
Total costs 985 000
Direct materials 350 000
Variable production overheads 50 000
Direct labour 200 000
Fixed production overheads 180 000
Variable selling and administration costs 80 000
Fixed selling and administration cost 125 000
Profit 25 000

The following information relates to the actual results for the year ended 28 February 2023:
Sales 90 000 units @ N$10.10
Opening inventory Nil
Closing inventory 8 000 units

The management accountant of WT had prepared a profit or loss statement on 28

February 2023 on a variable costing basis, which showed a loss. However, the profit
statement prepared on an absorption-costing basis at the same date showed that WT had
earned a profit. The company policy is to apply manufacturing overheads based on sales units.

The operations director of the company is reviewing both statements and is somewhat
confused. “You can never rely on the Accountants to give you the right figures”, he mutters
angrily under his breath as he reaches for his telephone.

REQUIRED: MARKS
1.1 Explain the major differences between direct costing and absorption costing 2
Prepare profit statements for WT for the year ended 28 February 2023
1.2 8
according to Direct Costing Methods
Prepare profit statements for WT for the year ended 28 February 2023
1.3 9
according to Absorption Costing Methods
1.4 Reconcile the profits produced by the two methods 4
TOTAL MARKS 23

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Question 2 (37 marks)

Windhoek Processors Ltd (“Windhoek Processors”) produces purple widgets, which require
processing through multiple production departments. The first department in the process is
the casting department, where the widgets are initially created. The widgets then move to the
trimming department for further work. During the month of July 2023, the casting department
incurred N$222 750 of direct material costs and N$141 050 of conversion costs (comprised of
direct labor and factory overhead).

Further information relating to the Casting department for July 2023 are as follows:

1 July 2023:
Work in progress: Material 10 000 units (100% complete) N$80 000
Conversion (60% complete) N$120 000

Units introduced in the current period 40 000

Units completed and transferred to the trimming department 30 000
Work in progress on 31 July 2023 14 000

Additional information:

• The Work-In-Progress on 31 July 2023 is 100% complete (material) and 80%

complete (conversion).
• Materials are added at the beginning of the process.
• Inspection for losses takes place when the process is 80% complete. Normal loss is
5% of the units that reached the inspection point.
• It is the company’s policy to value its inventories on the basis of First-In-First-Out
(FIFO).

REQUIRED: MARKS
2.1. State any two differences between FIFO method and Weighted Average 2
Method when it comes to their application in the Process costing system.
2.2. Prepare a full process costing report inclusive of all the necessary 35
schedules using FIFO. Clearly show all your workings in a coherent
manner.
2.3 Prepare a full process costing report inclusive of all the necessary
schedules using the Weighted Average Method. Clearly show all your 30
workings in a coherent manner.
TOTAL MARKS FOR QUESTION 2 67

QUESTION 3 (26 MARKS)

Namib Mills makes use of sugarcane to manufacture Marathon Sugar, Paper Pulp and
Molasses. Molasses is the only by-product obtained in the preparation of sugar through
repeated crystallisation, the yield of molasses per tonne of sugarcane is 5%. Molasses is sold
at N$5 per kg and the cost of repeated crystallisation is N$0.50 per kg.

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The company harvest a total of 9 tonnes of sugarcane in the current year, the company
harvests the exact amount of sugarcane planted. The amount of sugar extracted from a single
tonne of sugarcane amounts to 600kg and 350kg of paper pulp. The initial process of
manufacturing commences with the planting of cane setts (raw material) on the ground which
costs N$11 111 per tonne. The next step involves fertilising the ground to make it conducive
for production at a cost of N$1 389 per bag enough to cover a single tonne cane setts. The
company spend a total of N$54 000 on irrigation of the plantation.

Workers are involved in the plantation and harvesting of the sugarcane, throughout the entire
process. Labourers are paid at a rate of N$107.5 per hour and the total numbers of hours
worked in the year was 800 hours in total. A harvesting machine used during the harvesting
season is rented for an amount N$45 000 for the whole year.

Sugar produced from the sugarcane is sold for N$50 per kg and the paper pulp is sold for
N$40 per kg. After harvesting, the sugar has to go through a milling process before it is ready
to be sold. The milling process costs N$20 000 in total for the year. In order for the pulp from
the sugarcane to be turned into paper pulp, it has to be mixed with bleach and chemicals
before it becomes a finished paper pulp product. The bleach and chemicals used for the year
on the paper pulp amounted to N$15 000 in total. Namib Mills reduces the joint costs by the
net realizable value of the by-product.

REQUIRED: MARKS
3.1 Explain the physical units and the sales at split off methods of allocating joints 2
3.2 Explain the reason why we allocate joint costs 2
3.3 Calculate the total joint costs to be allocated 8
3.3 Allocate the joint costs using the Net Realizable Method 8
3.2 Allocate the joint costs using the Constant Gross Profit Percentage Method 6
TOTAL MARKS 26

Assignment 1: (116 marks)

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Assignment 2

QUESTION 1 (20 MARKS)

Typo Limited specialises in novelty products and is considering manufacturing a new range of
items that coincide with major festivals. The range will initially comprise two products, Tic and
Chi. To assist with budgeting, Typo Limited has collected the following information for the
month of November 2023.

Projected Sales Quantity Selling price per item

Tic 4 000 N$18
Chi 2 000 N$50

Production Requirements Cost per metre Tic Chi

Material Cer N$4 0.5 m 4m
Material Bac N$2 1m 3m

Finished Goods/Inventory Tic Chi

1 November 2023 200 0
30 November 2023 950 1 325

There is no opening or closing work in progress.

Materials Inventory Cer Bac

1 November 2023 6 000 m 20 000 m
30 November 2023 10 200 m 14 000 m

Labour and overhead costs

The standard direct labour required to produce each Tic unit is 30 minutes, and a Chi unit
takes 1 (one) hour to produce. Labour is paid at N$10 per hour. Variable overheads (which
will be incurred evenly over the year) are projected at N$360 000 per annum, and these are
to be absorbed into production on the basis of direct labour hours.

REQUIRED:
MARKS
Prepare the following budget statements
1.1 Production Budget 4
1.2 Material Purchasing budget (include quantity and Value) 9
1.3 Labour budget 3
1.4 Variable overhead absorption budget 4
TOTAL MARKS 20

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QUESTION 2 (20 MARKS)
Kaume Enterprises (“KE”) is a business that sells sweets. The company buys the sweets from
producers and then packages them into small assorted packs. The business has gained
popularity due to its assorted sweets that customers are not able to get such mixes elsewhere.

KE is in the process of preparing budgets for the first quarter of 2024 and the following
information has been made available.

1. The cash balance on 1st January 2024 is expected to amount to N$14 000.
2. Budgeted monthly sales units for the first four months of 2023 are as follows:

Month Units (packets)

January 12 000
February 18 000
March 15 000
April 14 000

3. KE will charge each packet of sweets for N$5 for January rising to N$7 in March 2024.
Sales are 30% cash and 70% credit. Credit sales are collected over a three-month
period, 10% in the month of sale, 60% in the month following the sale and 30% in the
second month following the sale. Total sales revenue in November 2024 and
December 2024 amounts to N$45 000 and N$54 000 respectively.
4. Cost of sales is expected to be 75% of sales revenue each month.
5. The business maintains its closing inventory levels at 60% of the following month’s
cost of sales. Inventory at the beginning of January is expected to amount to N$27
000.
6. 65% of inventory purchased is paid for in the month of purchase and the remaining
35% is paid for in the month following purchase. At the 31st December 2023 amounts
owed for purchases were N$13 800.
7. A loan of N$40 000 is expected to be received in January 2024. The company will
repay this loan evenly over 20 months commencing in February.
8. A motor vehicle which cost N$8 000 when purchased second hand three years ago is
expected to be sold in March 2024 for N$3 300. The expenses associated with this
sale are expected to be N$300.
9. Equipment costing N$12 000 will be purchased in January 2024 and paid for in
February. This equipment will be depreciated on a straight-line basis over three years.
10. Operating expenses are paid as incurred. These have been estimated as follows:

January 12 800
February 18 900
March 14 000

The above figures include depreciation on existing assets (excluding planned

purchases/disposals detailed above) of N$2 000 per month.

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Required Marks
Calculate the purchases requirement for each month from January 2023 to
2.1 6
March 2023.
2.2 Prepare a monthly cash budget for January, February and March 2023. 13
Outline any one potential benefits to KE from the preparation of the cash
2.3 1
budget
Total 20

QUESTION 3 (20 MARKS)

Namibia Wood Products (“NWP”) is a company that manufacturers different types of furniture
products under a job costing environment. To ensure that the company meets its customer
expectations and the same time achieve operational efficiency, the company employs a
standard costing system. At the end of each period, variances are calculated and
investigations are undertaken to identify areas of improvement.

The following information relates to the traditional wooden work bench that NWP produces
and supplies to Small to Medium workshops in Namibia.

Variance calculated:

Month: November 2022

Variances N$
Material price variance 25 000 Unfavourable
Material usage 16 500 Favourable
Labour rate 40 000 Favourable
Labour efficiency 22 000 Unfavourable

Actual data for the month of November 2022 was as follows:

Month: November 2022 N$ Units

Material costs 850 000 100 000 kilos
Labour costs 600 000 80 000 hours
Production volume 30 000 units

The actual and standard production volume for the month of November were the same.

Required: Marks
Prepare a standard cost sheet for the wooden work bench (Hint:
3.1 16
calculate the budgeted unit cost of one wooden bench)
Outline one possible reason for each of the labour and material
3.2 4
variances.
Total marks 20

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QUESTION 4 (5 MARKS)
The Eyesec Data Division of Champs Company is treated as an investment center for
performance measurement purposes. Selected financial information for such division for the
4th Quarter of 2022 is given below:

N$
Net Sales 200 000
Cost of Goods Sold 176 250
General and administration expenses 3 750
Average working capital 31 250
Average plant and equipment 68 750
Desired rate of return 15%

REQUIRED: MARKS
4.1 What was the Eyesec Data Division's Return On Investment for the 4th 3
Quarter of 2022?
4.2 What was the Eyesec Data Division's Residual Income for the 4th Quarter 2
of 2022?
TOTAL MARKS 5

Question 5 (6 marks)

Mr. Thomas is the manager of Care Corporation's Cute Care Division. Selma's performance
as an investment center manager is measured using the residual income method. Mr. Thomas’
goal for the coming year (2024) is to earn N$100 000 in residual income with a 20% imputed
interest charge. Other figures for the upcoming year are as follows:

N$
Working capital 90 000
Plant and equipment 860 000
Costs and expenses 1 210 000

REQUIRED: MARKS
6.2.1. How much should revenues be next year to achieve the residual income 3
target?
6.2.2. By what percent would the division's Return On Investment next year 3
exceed the desired rate of return?
TOTAL MARKS 6

Total Assignment 2: 71 marks

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