SECTION A

$[40$ MARKS$]$

Answer ALL the questions in this section.

QUESTION $1$

$(30$ Marks$)$

Review the information provided below and answer the following questions.

INFORMATION

Neptune Limited uses a technologically advanced production system to produce two joint products $-$ Product X and

Product Y $.$ The production facility comprises three production cost centres $(\backslash (\backslash$mathrm$\{$P$\}1,\backslash$mathrm$\{$P$\}2\backslash )$ and P $3)$ as well as two service cost centres $(\backslash (\backslash$$ $1\backslash )$ and S $2).$ The firm budgeted the following overhead costs for the year ended $31$ December $2023$:

$\backslash$begin$\{$tabular$\}\{|$l$|$r$|\}$

$\backslash$hline Expense & R $\backslash \backslash$

$\backslash$hline Rent and rates & $90000\backslash \backslash$

$\backslash$hline Repair of plant & $800000\backslash \backslash$

$\backslash$hline Depreciation of Plant & $600000\backslash \backslash$

$\backslash$hline Lighting & $60000\backslash \backslash$

$\backslash$hline Supervision & $1200000\backslash \backslash$

$\backslash$hline Inventory insurance & $180000\backslash \backslash$

$\backslash$hline Employee insurance contribution & $200000\backslash \backslash$

$\backslash$hline Electricity & $280000\backslash \backslash$

$\backslash$hline & $3410000\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$

Additional information extracted from the books of Neptune Limited:

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|$c$|$c$|$c$|\}$

$\backslash$hline Particulars & P$1$ & P$2$ & P$3$ & S$1$ & S$2\backslash \backslash$

$\backslash$hline Floor space $(\backslash (\backslash$mathrm$\{$m$\}^\{2\}\backslash ))$ & $9000$ & $6750$ & $6075$ & $3375$ & $1800\backslash \backslash$

$\backslash$hline Number of employees & $54$ & $48$ & $36$ & $24$ & $18\backslash \backslash$

$\backslash$hline Employee salaries & R$1800000$ & R$1500000$ & R$1200000$ & R$900000$ & R$600000\backslash \backslash$

$\backslash$hline Value of plant & R$4000000$ & R$3000000$ & R$2500000$ & R$500000$ & $-\backslash \backslash$

$\backslash$hline Value of inventory & R$4200000$ & R$2400000$ & R$1900000$ & R$300000$ & R$200000\backslash \backslash$

$\backslash$hline Kilowatt$-$hours & $50000$ & $38500$ & $25500$ & $16000$ & $10000\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$

A cost accountant at Neptune Limited estimated that each service cost centre $($ S $1$ and S $2)$ does work for other cost centres in the following proportions:

$\backslash$begin$\{$tabular$\}\{|$l$|$c$|$c$|$c$|$c$|$c$|\}$

$\backslash$hline & P$1$ & P$2$ & P$3$ & S$1$ & S$2\backslash \backslash$

$\backslash$hline Percentage of service cost centre S$1$ to & $\backslash (40\backslash \%\backslash )$ & $\backslash (30\backslash \%\backslash )$ & $\backslash (20\backslash \%\backslash )$ & $-$ & $\backslash (10\backslash \%\backslash )\backslash \backslash$

$\backslash$hline Percentage of service cost centre S$2$ to & $\backslash (35\backslash \%\backslash )$ & $\backslash (30\backslash \%\backslash )$ & $\backslash (30\backslash \%\backslash )$ & $\backslash (5\backslash \%\backslash )$ & $-\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$