MBA4807

ACCOUNTING FOR MANAGERS

May/June 2023
Duration: 3 Hours

First Examiner: Ms L Terre Blanche 100 Marks

Second Examiner: Ms MF Mamaregane
External Examiner: Dr F Munzhelele

THIS IS A NON-VENUE BASED INDIVIDUAL EXAMINATION

THIS EXAMINATION PAPER CONSISTS OF 7 PAGES

This examination question paper consists of three (3) pages.

INSTRUCTIONS TO CANDIDATE

• This examination will take place on 15 June 2023 from 10:00 to 13:00.
• Please note that the onus rests on you to ensure that your answer script uploaded onto Moodle
is the final and correct version. No amendments to submissions will be accepted after the
closing time.
• No late submissions will be accepted, and late submissions will be awarded a zero mark.
• Please number your answers correctly.
• The uploaded answer script must have a cover page (provided). Please ensure that the
module code, your registered name, identity number and student number appear on the cover
page.
• The answer script must have the signed honesty declaration form (provided). Please ensure
that you read, understand and sign the form.
• Answer each section/question of the examination on a new page (indicating the
section/question and the module code on the page).
• The answer script must be in PDF format only and the following naming convention of the final
file must be used when submitting the document on Moodle: STUDENT NUMBER_MBA4807
• It is your responsibility to ensure that the submitted document is not password protected and
the file submitted is not corrupted. If the marker is unable to access or open the submission
document, you will be awarded a zero mark for the examination.

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MAY/JUN 2023 EXAMINATION

Graduate School of Business Leadership

Examination Declaration of Honesty Form
▪ This declaration form must be personally completed by the candidate only.
▪ This form declares that the candidate commits to the University’s assessment policies and procedures applicable to this examination.
▪ Any candidate who fails to submit the declaration form will be deemed to not agree with the University’s assessment policies and as
such will not participate in the assessment.
▪ The completed form must be uploaded on the Moodle platform along with your examination.

CANDIDATE SURNAME

CANDIDATE FULL NAMES

ID/PASSPORT NUMBER

STUDENT NUMBER

MODULE CODE

MODULE NAME

CONTACT DETAILS

DECLARATION
• I declare that all the details provided by me on this form are true and correct.
• I am aware that the assessment date and time for MBA4807 is the 15th of June 2023 from 10:00 to 13:00.
• I undertake to comply with all the rules, regulations and policies of the University pertaining to this assessment.
• I agree that it is my responsibility to ensure that I have internet access to enable me to access Moodle during the
assessment period (May/Jun 2023).
• I agree that it is my responsibility to personally download and/or print and/or access the question paper provided
to me via the Moodle and to upload my answer sheets to the Moodle and that any late submission will not be
marked and will be graded at 0%.
• I am aware that my completed assessment must only be submitted via the Moodle platform.
• I am aware that the assessment will be conducted in the medium of English only.
• By submitting the MBA4807 assessment on the 15th of June 2023, I declare that:
• I have read the Unisa’s Students’ Disciplinary Code, available at
https://www.unisa.ac.za/static/corporate_web/Content/Apply%20for%20admission/Documents/Unisa-Students-
Disciplinary-Code-25-April-2014.pdf
• I have read the Policy for Copyright Infringement and Plagiarism, available at
https://www.unisa.ac.za/static/corporate_web/Content/Colleges/CGS/documents/copyrightinfringement_and_pla
giarism_policy_16nov05.pdf
• I know what plagiarism is, that plagiarism is wrong and that disciplinary steps can be taken against me if I am found
guilty of plagiarism.
• The MBA4807 Exam that I submitted is my own work and I have not received assistance and/or given
assistance from/to any person in completing this assessment.
• I have independently and individually completed the assessment without copying work from any other person/s
• I have not allowed any other student to copy my work.
• I know that if I am found to be in violation of this declaration I will receive 0% for this assessment and that Unisa
may investigate further and institute disciplinary action against me.

CANDIDATE
SIGNATURE

DATE

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MAY/JUN 2023 EXAMINATION

EXAMINATION COVER PAGE

MBA4807
MAY/JUN 2023
ACCOUNTING FOR MANAGERS
STUDENT NUMBER

FULL NAME

IDENTITY NUMBER

Question Marks
No
Examiners Moderator
1 2 3

Total

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SECTION A: FINANCIAL ACCOUNTING [50 MARKS]

Question 1 [20 Marks]

A skeleton of Athol Country Florists balance sheet appears as follows (amounts in

thousands):

Balance Sheet (Statement of financial position)

Cash R85 Total current R1 900

liabilities
Receivables a) Longterm debt e)
Inventories R762 Other longterm R720
liabilities
Prepaid expenses b)
Total current assets c)
PPE d) Share capital R185
Other assets R2 100 Retained earnings R3 465
Total assets R7 300 Total liabilities and f)
equity

Use the following ratio data to complete Athol Country Florist’s balance sheet:

a) Debt ratio is 0.50

b) Current ratio is 1.30
c) Acid-test ratio is 0.40

Question 2 [20 Marks]

Thembi Thandi, owner of Thandi Cleaners, drive-through dry cleaners, would like to
expand her business from its current location to a chain of cleaners. Revenues at the
one location have been increasing at an average of 8% per quarter. Profits have been
increasing accordingly. Thembi is conservative in spending and is a very hard worker.
She has an appointment with a banker to apply for a loan to expand the business.

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MAY/JUN 2023 EXAMINATION

To prepare for the appointment, she instructs you, as chief financial officer and payroll
clerk to copy the quarterly income statements for the past two years but not include a
balance sheet. Thembi already has a substantial loan from another bank. In fact, she
has very little of her own money invested in the business.

Required:

1) What is the ethical dilemma in this case? Who would be affected and how would
they be affected if you follow Thembi’s instructions? (5)

2) What responsibility do you have in this situation? (5)

3) If the banker does not receive the balance sheet, will he have all of the relevant
information needed for decision making? Why or why not? (4)

4) Will the information provided by Thembi be neutral? (2)

5) What should you do? Might someone be harmed by Thembi’s accounting

decision? Explain. (4)

Question 3 [10 Marks]

Apply your understanding of the relationships among the financial statements to

answer the following questions:

a) How can a business earn large profits but have a small balance of retained
earnings? (2)
b) Give two reasons why a business can have a steady stream of net income over
a six-year period and still experience a cash shortage. (2)
c) If you could pick a single source of cash for your business, what would it be?
Why? (3)
d) How can a business lose money several years in a row and still have plenty of
cash? (3)

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MAY/JUN 2023 EXAMINATION

SECTION B: MANAGEMENT ACCOUNTING [50 MARKS]

Question 1 [20]

Consider the following two mutually exclusive projects:

Year Cash Flows A Cash Flows B

R R
0 -175 000 -20 000
1 10 000 10 000
2 25 000 5 000
3 25 000 3 000
4 375 000 1 000

You require a 15 per cent return on your investment.

(a) If you apply the payback rule, which investment will you choose? Why? (6)
(b) If you apply the NPV rule, which investment will you choose? Why? (6)
(c) If you apply the IRR rule, which investment will you choose? Why? (6)
(d) Based on your answers in (a) through (c), which project will you finally (2)
choose? Why?

Question 2 [30]

a) Discretionary costs are troublesome because managers usually find it difficult to

separate and quantify the results of their ise in business. As compared with variable and
other fixed costs.
You are required to discuss the above statement and include in your answer the meaning
of discretionary costs, variable costs and fixed costs; give two illustrations of each of
these three named costs. (12)

b) A drug company has initiated a research project which is intended to develop a new
product. Expenditures to date on this particular research total R500 000 but it is now
estimated that a further R200 000 will need to be spent before the product can be
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MAY/JUN 2023 EXAMINATION

marketed. Over the estimated life of the product the profit potential has a net present
value of R350 000. You are required to advise management whether they should
continue to abandon the project. Support your conclusion with a numerate statement
and state what kind of cost is the R500 000. (10)

c) Opportunity costs are not recognized by financial accounting systems but need to be
considered in many decisions taken by management. You are required to explain briefly
the meaning of opportunity costs and give two examples to illustrate the meaning you
have attached to this. (8)
[Total: 100 Marks]

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UNISA 2023