EcoPack Manufacturing (Pty) Ltd operates in the sustainable packaging sector and manufactures two biodegradable packaging products: · EcoTray (ET) – compostable food trays. · EcoCup (EC) – compostable beverage cups. EcoPack uses the absorption costing system , and fixed manufacturing overheads (FMO) are allocated based on labour hours Inventory is valued using the FIFO method. The financial year-end is 31 December 2026. Budget Information for the Year Ending 31 December 2026 Additional Information: Eco Pack budgeted to sell 90% of production unit. The selling price per unit is R21,00 per unit for EcoTray and R15,50 per unit for EcoCup, respectively. No direct materials or any other losses occur during the manufacturing process. The manufacturing process is mostly automated, with machines doing most of the work. Direct labour is mainly required to monitor the machines, perform basic quality checks and handle materials. Each EcoTray requires 8 minutes of direct labour, and each EcoCup requires 6 minutes of direct labour. The same direct labour rate per hour applies to both products. The entity does not budget for work-in-progress inventory, as all goods produced are completed and transferred to finished goods. The variable manufacturing overheads are R2,20 per EcoTray and R1,40 per EcoCup. Total Fixed manufacturing overheads (FMO) are R3 000 000 per year. EcoPack pays sales commission of 3% of selling price. For question 8 only assume that: (i) Closing inventory for EcoTray is 350 000 units. (ii) Fixed manufacturing overhead rate per unit is R2,20 (iii) Contribution per unit for Eco Tray is R12 per unit (iv) All other information remains unchanged as indicated above remains the same The budgeted closing inventory Rand-value (rounded to the nearest rand) of EcoTray for 2026 is _______.

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EcoPack Manufacturing (Pty) Ltd operates in the sustainable packaging sector a...

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EcoPack Manufacturing (Pty) Ltd operates in the sustainable packaging sector and manufactures two biodegradable packaging products:

· EcoTray (ET) – compostable food trays.

· EcoCup (EC) – compostable beverage cups.

EcoPack uses the absorption costing system, and fixed manufacturing overheads (FMO) are allocated based on labour hours Inventory is valued using the FIFO method. The financial year-end is 31 December 2026.

Budget Information for the Year Ending 31 December 2026

Details	Notes	EcoTray(ET) R	EcoCup(EC) R	Total R
Production units	1.1	3 500 000	7 000 000	10 500 000
Direct material costs	1.2	R8 000 000	R6 000 000	R14 000 000
Direct labour costs	1.3	R3 420 000	?	?
Variable manufacturing overheads	1.5	?	?	?
Fixed manufacturing overheads	1.6	?	?	R3 000 000
Sales commission	1.7	?	?	?

Additional Information:

Eco Pack budgeted to sell 90% of production unit. The selling price per unit is R21,00 per unit for EcoTray and R15,50 per unit for EcoCup, respectively.
No direct materials or any other losses occur during the manufacturing process. The manufacturing process is mostly automated, with machines doing most of the work.
Direct labour is mainly required to monitor the machines, perform basic quality checks and handle materials. Each EcoTray requires 8 minutes of direct labour, and each EcoCup requires 6 minutes of direct labour. The same direct labour rate per hour applies to both products.
The entity does not budget for work-in-progress inventory, as all goods produced are completed and transferred to finished goods.
The variable manufacturing overheads are R2,20 per EcoTray and R1,40 per EcoCup.Total Fixed manufacturing overheads (FMO) are R3 000 000 per year.
EcoPack pays sales commission of 3% of selling price.

For

question 8 only assume that:

(i)

Closing inventory for EcoTray is

350 000 units.

(ii)

Fixed manufacturing overhead rate per unit

is R2,20

(iii)

Contribution per unit for Eco Tray is

R12 per unit

(iv) All