: Cost Accounting ACCT301

Description

Q1. What information is relevant for decision-making? Differentiate between relevant and irrelevant information for decision-making. Support your answer by explaining the information in the context of an organization.(3 Marks)

Note: Your answer must include suitable examples of relevant and irrelevant information for decision-making. (Week 2, Chapter 1)

Answer:

Q2. A&D Ltd. is in the manufacturing of wooden products and makes several wooden items. The following values are related to a particular wooden item:

Particulars

Selling price per unit

SAR 1,100

Variable cost per unit

SAR 400

Total fixed costs

SAR 500,000

Estimated next yearàbudgeted sales

1,200 units

You are required to calculate:(4 Marks)

BEP in units and BEP in sales SAR

Degree of operating leverage

Margin of safety in units

Margin of safety in SAR (Week 4, Chapter 3)

Answer:

Q3. The information below was derived from the 2018 records of HCS Company:(4 Marks)

Month

Units Produced

Total Cost (SAR)

May

4,350

44,200

June

4,700

44,700

July

5,000

45,000

August

5,400

45,400

September

5,650

47,500

October

5,900

57,150

November
3,450

40,000

December

4,100

40,600

Using the high-low method of analysis, calculate

Variable cost

Fixed cost, and

Determine a cost function. (Week 3, Chapter 2)

Answer:

Q4. The following transactions are related to a particular job. You are required to make the necessary journal entries.(4 Marks)

The materials storeroom receives a shipment of direct and indirect materials that cost SAR 50,000.

Materials are sent to the stamping and assembly areas.The cost of the direct materials is SAR 5,600 and the cost of the indirect materials is SAR 3,200.

Wages totaling SAR 7,000 are accrued; 60% of these costs are direct labor and 40% are indirect labor.

Overhead costs are allocated to work in process using an allocation rate of 250% of direct labor costs.

Job no. 25, with a total cost of SAR 8,500 is completed.

Job no. 25 is shipped to the customer, who is billed for SAR 15,000.

Explanation & Answer:

4 Questions

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