Assignment Question(s): (Marks 15)
Q1. Differentiate with suitable examples the traditional costing systems and activity-based costing. Explain how ABC is used in manufacturing by providing a numerical example. (3 Marks)
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. (Week 7, Chapter 7)
Q2. RCR has two support departments, X1 and X2, and two operating departments, Z1 and Z2. RCR has decided to use the direct method and allocate variable X1 dept. costs based on the number of transactions and fixed X1 dept. costs based on the number of employees. X2 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: (Week 9, Chapter 8) (4 Marks)
| |
Support Departments |
Operating Departments |
| |
X1 |
X2 |
Z1 |
Z2 |
| Total Department variable costs |
12,500 |
15,000 |
95,000 |
52,500 |
| Total department fixed costs |
14,500 |
27,500 |
105,000 |
45,000 |
| Number of transactions |
38 |
45 |
175 |
112 |
| Number of employees |
14 |
18 |
38 |
30 |
| Number of service requests |
30 |
18 |
38 |
25 |
| Number of computers |
15 |
20 |
25 |
30 |
You are required to allocate the variable and fixed costs.
Q3. Provide a numerical example of special order decisions and make or buy decisions and explain how these decisions are backed by quantitative and qualitative considerations. (4 Marks)
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. (Week 8, Chapter 4)
Q4. K&C Ltd. is working on a budget for the current year. The following information is linked to budget preparation:(4Marks)
(Week 10, Chapter 10)
Budgeted selling price per unit = SAR 450 per unit
Total fixed costs = SAR 275,000
Variable costs = SAR 150 per unit
Required:
You are required to prepare a flexible budget for 1,000, 1,500, 2,000, and 2,500 units.
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