Overview
Instructions – PLEASE READ THEM CAREFULLY
• The Assignment must be submitted on Blackboard (WORD format only) via allocatedfolder.
• Assignments submitted through email will not be accepted.
• Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.
• Students must mention question number clearly in their answer.
• Late submission will NOT be accepted.
• Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.
• All answers must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism.
• Submissions without this cover page will NOT be accepted.
Assignment Questions: (Marks 15)
Question 1 – Explain the following methods to allocate Support Department Cost to Operating Department with Suitable Numerical Example. (5 Marks)
a) Step Down Method
b) Reciprocal Method
Question 2 - ‘Grow Well Juice’ company produces three products differently. These products are jointly produced up to certain stage and afterwards they are identified separately as Product A, B and C. The joint cost of processing these products are SAR 120,000. You are required to allocate this Joint Cost among the three different product by using the following methods. (5 Marks)
A) Sales Value at Split Off Method
B) Net Realizable Value (NRV) Method
The quantitative information of these products are as follows:
Products | KG Produced | Selling Price Per KG at Split Off | Final Sale Value | Separable Cost |
A | 20,000 | SAR 1.2 | 70,000 | 6,000 |
B | 40,000 | SAR 1.4 | 94,000 | 9,000 |
C | 80,000 | SAR 0.8 | 80,000 | 10,000 |
Question 3 - Robert Inc. is preparing a budget for 2024. The budgeted selling price per unit is $ 12, and total fixed costs for 2024 are estimated to be $ 8,000. Variable Cost are budgeted at $ 3/unit. Prepare a flexible budget for the volume level of 2000, 2500 and 3000. (5 Marks)