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 THEIRWORK 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 ownwords, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.
• All answers must be typed usingTimes 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)
1. A company provided the following information regarding its units produced and total cost incurred:
Units Produced | Total Cost (SAR) |
5000 | 20,000 |
7400 | 27,200 |
Using Two-Point Method you are required to determine: (2+2+1 Marks)
a) Variable Cost per unit
b) Total Fixed Cost
c) Cost Function
2. BILL’S BRIEFCASES MAKES HIGH QUALITY CASES FOR LAPTOPS THAT SELL FOR $200. THE VARIABLE COSTS PER BRIEFCASE ARE $80, AND THE TOTAL FIXED COSTS ARE $360,000. CURRENTLY BILL’S SALESPERSONS HAVE SALARIES TOTALING $80,000 (INCLUDED IN FIXED COST OF $360,000) AND EARN A 10% COMMISSION ON EACH UNIT ($20 PER BRIEFCASE). HE IS CONSIDERING AN ALTERNATIVECOMPENSATION ARRANGEMENT WHERE THE SALARIES ARE DECREASED TO $30,000 AND THE COMMISSION IS INCREASED TO 20% ($40 PER BRIEFCASE).
YOU ARE REQUIRED TO: (2+3 MARKS)
A) COMPUTE THE BREAK EVEN POINT IN UNITS UNDER THE PROPOSED ALTERNATIVE.
b) Compute the volume of sales in units for which Bill is indifferent between the two alternatives.
3. Prepare Journal Entries from the following information relating to Job Costing.
a) The material storeroom receives a shipment of direct and indirect materials that cost $ 12,000.
b) Materials are sent to the stamping and assembly areas. The Cost of the direct materials is $ 1,500 and the cost of the indirect materials is $ 900.
c) Wages totaling $ 2,000 are accrued; 70 % of these costs are direct labour and 30% are indirect labour.
d) Overhead costs are allocated to work in process using an allocation rate of 150% of direct labourcosts.
e) Job No. 1205, with a total cost of $ 2,500 is completed.
(5 X1 Mark)