Overview
Assignment (1)
Deadline: Saturday 12/07/2025 @ 23:59
| Course Name: Managerial Accounting | Student’s Name: |
| Course Code: ACCT322 | Student’s ID Number: |
| Semester: Summer | CRN: |
| Academic Year: 1446 H |
For Instructor’s Use only
| Instructor’s Name: | |
| Students’ Grade:/15 | Level of Marks: High/Middle/Low |
Instructions – PLEASE READ THEM CAREFULLY
- 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 Question(s): (Marks 15)
Q1. Managerial accounting reports provides both objective measures of past operations and subjective estimates about future decisions. Therefore, management accountants interpret cost behavior to evaluate and describe accounting systems used for decision making in businesses.
Explain, how management accountants classify costs to interpret cost behavior for decision making. Give examples. (Marks 3)
Answer:
Q2. ABC Corporation uses process costing. A number of transactions that occurred in June,2018 are listed below. Amounts in SR. (3 marks) (1) Raw materials that cost 40,000 are withdrawn from the storeroom for use in the Mixing Department. All of these raw materials are classified as direct materials. (2) Direct labor costs of 35,000 are incurred, but not yet paid, in the Mixing Department. (3) Manufacturing overhead of 50,000 is applied in the Mixing Department using the department's predetermined overhead rate. (4) Units with a carrying cost of 115,000 finish processing in the Mixing Department and are transferred to the Drying Department for further processing. (5) Units with a carrying cost of 150,000 finish processing in the Drying Department, the final step in the production process, and are transferred to the finished goods warehouse. (6) Finished goods with a carrying cost of 140,000 are sold. Required: Prepare journal entries for each of the transactions listed above. Answer:
Q3. Najad Corporation manufactures a variety of products. In the past, Najad has been using a traditional costing system in which the predetermined overhead rate was 150% of direct labor cost. Selling prices had been set by multiplying total product cost by 200%. Sensing that this system was distorting costs and selling prices, Najad has decided to switch to an activity-based costing system for manufacturing overhead costs using three activity cost pools. Selling prices are still to be set at 200% of unit product cost under the new system. Information on these cost pools for next year are as follows: Information (on a per unit basis) related to three popular products at Najad are as follows: Required: Under the activity-based costing system, calculate the selling price of one unit for the model 19 & Model36? (Marks 5)
Answer:
Q4. The following is Allison Corporation's contribution format income statement for last month:
| Account title | Amount in SR |
| Sales | 850,000 |
| Variable Cost | 250,000 |
| Contribution Margin | 600,000 |
| Fixed Expenses | 450,000 |
| Net operating Income | 150,000 |
The company has no beginning or ending inventories. The company produced and sold 15,000 units last month.
Required: (4 Marks)
- Compute Margin of Safety.
- What is the company's degree of operating leverage?
Answer: