MAC2601 Assignment 2 Semester 1 2026 – Due 17 April 2026

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MAC2601 Assignment 2 2026

QUESTION 1 (24 MARKS)

Rirhi (Pty) Ltd (“Rirhi”) makes and sells luxury blankets. The company was established in
2015 by Rirhandzu Nkhwashu in Giyani in the Limpopo province. The company has grown
rapidly and has opened branches in other provinces.

Budgeted information
The budgeted selling price and costs per blanket (“unit”) for the year ended 31
December 2025 were as follows:
R
Selling price per unit……………………………………………………. 400
Variable costs per unit:

Direct materials…………………………………………………………. 120
Direct labour……………………………………………………………… 80
Variable manufacturing overheads…………………………………….. 60
Variable selling and administrative expenses………………………… 25
 The company budgeted to sell 20 000 blankets, and the budgeted fixed selling and
administration costs were budgeted as R500 000.
 Variable manufacturing overheads vary with the number of units produced.
 The budgeted fixed manufacturing overheads amounted to R2 000 000.
 Opening and closing inventory units were both budgeted to be 0 (nil) units.
Actual information for the year ended 31 December 2025 were as follows:
 The actual selling price and variable cost per unit were as budgeted for the 2025
financial year. Actual variable manufacturing costs per unit did not change from the

REQUIRED
Round to the nearest Rand throughout your calculations.
Marks
(a) Prepare the actual income statement (Statement of Profit or Loss) for the
year ended 31 December 2025 according to the following:
i) Direct costing method
ii) Absorption costing method

(9)
(10)
(b) Reconcile the differences between the net profits calculated in (a) above.
(3)
(c) Explain the reason why Rirhi’s net profit according to the direct costing
method differs from its net profit according to the absorption costing
method for the 2025 financial year.
(2)
TOTAL:
[24]

QUESTION 2 (10 MARKS)

Dee (Pty) Ltd is an engineering company based in Orlando West, Soweto. The company
was established by Dieketseng Moreki in 2024 after she graduated with an engineering
degree from the University of South Africa. The company has three production departments:
Machining, Assembly and Finishing, and two service departments: Stores and Maintenance.

Question 3……………………………………………….