Accounting Question

College of Administrative &Financial Sciences
Managerial accounting:
Assignment Question(s):
Q1. ABC prepares budgets for the quarter ending sept.30. Sales in units: July 20,000, August
50,000, September.30, 000, Oct. 25,000. Selling price is SR 10 per unit. , inventory in June 31, is
4,000 units. Desired inventory is 20% of the next month sales. (5 marks)
Required: Prepare sales and production budgets.
ANSWER:
Q2. ABC Company has equipment, and it considers whether to sell it directly at a price of SR
200,000 or to make some modifications costing SR 10,000 to sell it at a price of SR 220,000.
Required:
Using the differential analysis which alternative do you recommend about the equipment.
Answer:
Q3. Riyadh Corporation has average operating assets of SR 450,000 and is required to earn a
return of 35% on these assets. In the current period, the division earns net income of SR
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College of Administrative &Financial Sciences
75,000.
Required:
Compute the residual income.
ANSWER:
Q.4- Saudi and German Joint Corporation is a division of a major corporation. Last year the
division had total sales of SAR 85,780,000, net operating income of SAR 8,697,570, and average
operating assets of SAR 11,000,000. The company’s minimum required rate of return is 15%.
Required:
a. What is the division’s margin?
b. What is the division’s turnover?
c. What is the division’s return on investment (ROI)?
Answer
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