Accounting Question

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. What is the process of identifying activities in an organisation and assigning costs under the Activity Based Costing (ABC) system? Elucidate. You will need to include the right numerical examples to support your answer. (2 Marks) (Chapter 7, Week 7)

Answer:

Q2. PPLC Company has two support departments, SD1 and SD2, and two operating departments, OD1 and OD2. The company decided to use the direct method and allocate variable SD1 dept. costs based on the number of transactions and fixed SD1 dept. costs based on the number of employees. SD2 dept. variable costs will be allocated based on the number of service requests, and fixed costs will be allocated based on the number of computers. The following information is provided: (4 Marks) (Chapter 8, Week 10)

Support Departments

Operating Departments

SD1

SD2

OD1

OD2

Total Department variable costs

18,000

19,000

51,000

35,000

Total department fixed costs

20,000

24,000

56,000

30,000

Number of transactions

30

40

200

100

Number of employees

14

18

35

30

Number of service requests

28

18

35

25

Number of computers

15

20

24

28

You are required to allocate variable and fixed costs using direct method.

Answer:

Q3. What are an organization’s outsourcing decisions and constrained resource decisions? Provide a suitable numerical example of these decisions and explain how quantitative and qualitative considerations support a company’s decision-making process.

(2 Marks) (Chapter 4, Week 9)

Note: Your answer must include suitable numerical examples. You are required to assume values of your own, and they should not be copied from any sources.

Answer:

Q4. VBN plastic industry makes three plastic toys: T1, T2, and T3. The joint costs of the three products in 2017 were SAR 120,000. The total number of units for each product and the selling price per unit is given below:(3 Marks) (Chapter 9, Week 11)

Product

Units

Selling Price per unit

T1

45,000

SAR 15

T2

26,000

SAR 14

T3

18,000

SAR 10

You are required to allocate the joint costs to each product using the physical volume method and sales value at the split-off method.

Answer:

Q5. MN&M Corporation is preparing a budget for 2018. The company provides you with the following details which will help you to prepare the budget:

(4 Marks) (Chapter 10, Week 12)

Budgeted selling price per unit = SAR 500 per unit

Total fixed costs = SAR 150,000

Variable costs = SAR 100 per unit

Required:

You are required to prepare a flexible budget for 1,000, 1,100, 1,200 and 1,300 units.

Answer: