Overview
- The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.
- 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)
- Determine the cost function from the following information using Account Analysis method. (5 Marks)
- Suppose Ali Inc. has budgeted next years’ sales at 12,000 units of a product. The selling price per unit is SAR 90, Variable Cost per unit is SAR 30, and Total Fixed Cost is SAR 450,000. (5 Marks)
- Akbar Inc. expected to use 25,000 Direct Labour hours this year; overhead is allocated to WIP using Direct Labour Hours. Job # 5 shows total cost of $ 15,000. An inspection reveals that 15% of Job # 5 must be scrapped and sold for $ 200. Job # 5 was originally a batch of 8000 units. (5 Marks)
Expense | Amount | Variable | Fixed |
Direct Materials | $400,000 | 400,000 | |
Direct Labor | 200,000 | 200,000 | |
Rent | 25,000 | 25,000 | |
Insurance | 15,000 | 15,000 | |
Commissions | 180,000 | 180,000 | |
Telephone Expenses | 20,000 | 20,000 | |
Depreciation | 70,000 | 70,000 | |
Power & Light | 30,000 | 30,000 | |
Admin Salaries | 40,000 | 40,000 |
Additional Information: 1) During the year 100,000 units were produced and sold.
2) Selling price per unit was $ 4.
Required:
- Determine the cost function using units produced as the cost driver.
- Determine the cost function using Sales ($) as the cost driver.
Determine the Following:
- BEP in units
- Contribution Margin Ratio
- BEP in Sales (SAR)
- Margin of Safety Percentage
- Degree of Operating Leverage
Requirement:
- Prepare Journal Entry to record the spoilage and the sale of the scrap if the spoilage is considered normal and is not due to the demanding specification of Job # 5.
- Determine the manufacturing cost per units for the good units in Job # 5, if the spoilage is considered normal and is not due to the demanding specification of Job # 5.
- Prepare Journal Entry to record the spoilage and the sale of the scrap if the spoilage is considered abnormal and occurred due to the demanding specification of Job # 5.
- Determine the manufacturing cost per units for the good units in Job # 5, if the spoilage is considered abnormal and occurred due to the demanding specification of Job # 5.