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 Assessment Opportunity 4

ASSESSMENT DATE 30 May 2022 SESSION 09:00 – 10:30

ASSESSOR(S) M Janse van Rensburg, L Joubert, K Motaung
MODERATOR(S) C Koto, R Kole
DURATION 1½ hours (90 min) TOTAL MARKS 50

NUMBER OF PAGES OF QUESTION PAPER (Including cover page) 4

INFORMATION / INSTRUCTIONS:
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 This is a closed-book assessment.
 You may use silent, non-programmable calculators.
 Round all calculations to two decimals unless stipulated otherwise.
 Indicate your index number (next to your name on the attendance register) at the
top of your answer sheet, in the centre.
 Answer each question in a separate book:
Question 1 – Yellow, Question 2 – RED
 Read the questions carefully and answer only what is required.
 Number your answers clearly and correctly as per the question paper.
 Write neatly and legibly in the answer book, starting on the first page (both sides).
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QUESTION TOPIC MARKS MINUTES

1 Operational budgets 30 54
2 Cash budget 20 36
AO4 CFM33A3 2022
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Question 1 {30}

Shadow Mate Ltd manufactures and sells two different umbrellas, in various colours, to the
public. The company is known for their exceptional quality of products. The stick umbrella is
more popular than the collapsible umbrella, and the company has the largest market share
for both products. The projected sales volumes for September are 950 for stick and 700 for
collapsible umbrellas, respectively. The projected selling price, for each product, for
September is calculated at 40% on the variable production cost.

The umbrellas are manufactured by machine and then assembled by semi-skilled workers.
Two separate departments exist, machine and assembly. Shadow Mate uses steel to
manufacture the shaft, ribs and stretchers of the umbrellas and nylon is used for the canopy.

Information available for September:

Required per Required per

stick umbrella collapsible Cost
umbrella
Direct material
Steel (1 000g = 1 kg) 200 grams 250 grams R20 per kilogram
Nylon 1 meter 1¼ meter R16 per meter

Labour
Machine department 3 machine hours 3 machine hours R40 per hour
and 30 minutes
Assembly department 1 labour hour 1 labour hour R50 per hour
and 45 minutes

Variable overheads
Based on machine hours R20 per hour

Fixed overheads
Total manufacturing R28 000

The purchase price of the material is not expected to change in September.

2
AO4 CFM33A3 2022
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Inventories:

August Target September

Stick umbrella 220 units 240 units
Collapsible umbrella 130 units 110 units
Steel 12 kilogram 9 kilogram
Nylon 8 meter 6 meter

REQUIRED:

Prepare the following budgets for September:

1.1 Production budget. (3)

1.2 Material purchases budget (quantities and value). (9)

1.3 Direct labour budget (prepare two budgets for the two departments). (7)

1.4 Manufacturing overheads budget. (3)

1.5 Sales budget (show all your calculations clearly).

Assume a selling price of R451.50 for Collapsible Umbrellas. (8)

3
AO4 CFM33A3 2022
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Question 2 {20}

Sun Mate Limited manufactures sunscreens of different SPF levels to protect human skin
against harmful UVB rays. The company is very innovative and therefore offers high-quality
water-resistant products. The following budgeted information applies to Sun Mate Limited:

Sales Salaries Purchases

February R128 800 R75 000
March R215 000 R129 000 R176 000
April R320 000 R123 500 R255 000
May R466 000 R130 400 R218 000
June ? R132 000 R212 000

Additional information:

 Cash sales amount to 25% of total sales. Sun Mate grants a discount of 5% for all cash
sales.
 60% of credit sales are collected in the next month. Sun Mate expects 5% of the credit
sales to be irrecoverable. The remainder of the outstanding credit sales is collected two
months later.
 June sales are expected to increase by 30% compared to May.
 Sun Mate pays 40% of the purchases one month after purchase and the rest two
months after purchase.
 Salaries are paid to employees at the end of the month they were earned.
 All other overheads amount to R31 400 per month and are paid in cash when it incurs.
This amount excludes depreciation on equipment of R3 600.
 Overdraft facilities are available.
 The opening bank balance on 1 May 2022 amounted to R32 500 (favourable).

REQUIRED:

2.1 Compile the cash budget for May and June. Clearly indicate the total
cash receipts, total cash payments, surplus or deficit, as well as the
expected opening and closing bank balances for each month. (20)

[Paper total = 50 marks]