Accounting Question

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.

PPLC Company has two support departments,

SD1

and

SD2

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, 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

SD1SD2OD1OD2

,000

,000

,000

,000

,000

30

183530

1835

202428

Support Departments	Operating Departments
Total Department variable costs			18	19,000	51,000			35
Total department fixed costs		20		24	56,000			30
Number of transactions	40	200	100
Number of employees	14
Number of service requests		28	25
Number of computers	15

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 industrymakes three plastic toys:

T1

,

T2

, and

T3

. The joint costs of the three products in 2017 were SAR 1

20,000

. The total number of units for each product and the selling price per unit is given below:(3 Marks)(Chapter 9, Week 11)

T1

T2

T3

Product	Units	Selling Price per unit
45,000	SAR 15
26,000	SAR 14
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 15

0,000

Variable costs =

SAR 10

0 per unit

Required:

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

College of Administration and Finance Sciences
Assignment (2)
Deadline: Saturday 04/05/2024 @ 23:59
Course Name: Cost Accounting
Student’s Name:
Course Code: ACCT 301
Student’s ID Number:
Semester: Second
CRN:
Academic Year: 1445 H
For Instructor’s Use only
Instructor’s Name: Dr. Shahid Husain
Students’ Grade:
/15
Level of Marks: High/Middle/Low
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.
College of Administration and Finance Sciences
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
College of Administration and Finance Sciences
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:
College of Administration and Finance Sciences
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: