Unit 3 practice question

Question 1
Snake Park is a recreational facility in the Vaal area owned by Mr E Sfubeni. It consists of
various departments that all work together to ensure that ensure smooth operations and the
satisfactions of its visitors. The Park is open from 10:00 to 20:00 (10 hours) for all 7 days of
the week.
The finance department consists of 5 employees whom all have CIMA qualifications. The
employees are paid a fixed salary of R16 500 per month and are only allowed to work a
maximum of 10 hours overtime monthly. Only 2 employees worked the 10 hours overtime
but only for 2 months. Employees are paid R200 per hour of overtime worked. As an
incentive, Snake Park pays its employees an annual 7% bonus in order to retain employees
and motivate them.
Each employee is required by law to pay UIF and SARS-PAYE at 1% and 3% respectively
of their total annual salary. They also must contribute R500 each towards their pension fund
and medical aid.
In addition to the finance staff, Snake Park has 10 employees that maintain the facilities of
the park. These employees are paid on an hourly basis. Each one is allowed 2 weeks of
annual leave and an additional 1 week of sick leave per annum of 52 weeks. Each of the
employees use up all their leave days. The company is closed for 7 of the public holidays in
the year. The employees are unoccupied for 10% of the time which is usually when the park
opens for the day.
The maintenance staff is paid R45 per hour and are allowed a 7% bonus of their annual
salary at the end of each year. They contribute R500 to both medical aid and pension fund
annually and the Park matches this on a rand basis.

Required
1.1 Calculate the gross remuneration of the finance department employees.
1.2 Calculate the taxable income of the finance department employees
1.3 Calculate the total net earnings of the finance department employees
1.4Calculate the total hours worked per maintenance employee.
1.5 Calculate the total cost to Snake Park for the maintenance employees
1.6 Calculate the labour recovery rate per maintenance employee.
Unit 3 practice question memo

Question 1

Amount (R)
Salary (R16 500*5*12) 990 000
Overtime (R200*10*2) *2 8 000
Annual bonus (990 000*7%) OR (16 500*7%*5*12) 69 300
1.1Gross remuneration 1 067 300
Pension fund contribution (R500*5) (2 500)
1.2Taxable income 1 064 800
UIF @ 1% (990 000*1%) (9 900)
SARS-PAYE@ 3% (990 000*3%) (29 700)
Medical aid contributions (R 500*5) (2 500)
1 022
1.3Total net salary
700

1.4
Number of weeks 52
Annual leave (2)
Weeks available to work 50
Hours per week (10*7) 70
Total expected hours worked(70*50) 3 500
Sick leave (7*10) (70)
Public holiday (7*10) (70)
3360
Idle time (3360*10%) (336)
Total actual hours worked 3024
*Calculated per employee

1.5
Amount (R)
Basic Wage (3024*R45) 136 080
Bonus (136 080*7%) 9 525,6
Employer’s contribution
Pension fund 500
Medical aid 500
Total cost per employee 146 605,6

Total cost to company = R146 605,6*10

= R1 446 056
1.6 R 146 605,6/3024 hours = R 48,48