Saudi Electronic University Routine Operating Decisions Discussion
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suitable examples. List all non-routine operating decisions and explain any two decisions with
suitable examples.
(3 Marks)
Note: Your answer must include numerical examples for each method along with qualitative
consideration.
(Week 8, Chapter 4)
Answer:
Q2. Suppose that you are working in a company as a cost manager that has two support
departments and two operating departments. Determine the total department cost and allocation
base for these departments and allocate the support department cost to the operating
department based on the following methods:
he direct method
he step-down method
(4 Marks)
Note: You are required to assume values of your own and they should not be copied from any
sources.
(Week 9, Chapter 8)
Answer:
Q3. SFC Company is in the manufacturing process of wooden products and makes several
wooden items. The following is the information related to three products manufactured by SFC
company: Product X, Y, and Z. The joint costs of the three products in 2015 were SAR 110,000.
The total number of units for each product and the selling price per unit is given below:
(Week 10, Chapter 9)
Products
Units
Selling Price per unit
X
5,000
SAR 150
Y
3,500
SAR 125
Z
2,200
SAR 100
Using the physical volume method and sales value at the split-off method, allocate the joint costs
to each product.
(4 Marks)
Answer:
Q4. A company is planning to prepare a budget for the year 2017 and provides you with the
following information regarding the preparation of the budget:
Particulars
(4 Marks)
Amount
Budgeted selling price per unit
$650 per unit
Total fixed costs
$155,000
Variable costs
$175 per unit
You are required to prepare a flexible budget for 500, 600, 700, and 800 units.
(Week 10, Chapter 10)
Answer:
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