Accounting Question

Part 1
1. Managerial accounting reports provides both objective measures of past
operations and subjective estimates about future decisions. Therefore,
management accountants interpret cost behavior to. evaluate and describe
accounting systems used for decision making in businesses.
Explain, how management accountants classify costs to interpret cost behavior for
decision making. Give examples.
Answer:
2. XYZ Corporation, a merchandising company, reported sales of 7,400 units for
May at a selling price of $677 per unit. The cost of goods sold (all variable) was
$441 per unit and the variable selling expense was $54 per unit. The total fixed
selling expense was $155,600. The variable administrative expense was $24 per
unit and the total fixed administrative expense was $370,400.
Required:
a. Prepare a contribution format income statement for May.
b. Prepare a traditional format income statement for May.
Answer:
Najad Corporation manufactures a variety of products. In the past, Najad has
been using a traditional costing system in which the predetermined overhead
rate was 150% of direct labor cost. Selling prices had been set by multiplying
total product cost by 200%. Sensing that this system was distorting costs and
selling prices, Najad has decided to switch to an activity-based costing system
for manufacturing overhead costs using three activity cost pools. Selling prices
are still to be set at 200% of unit product cost under the new system. Information
on
these
cost
pools
for
next
year
are
as
follows:
Information (on a per unit basis) related to three popular products at Najad are
as
follows:
Required:
Under the activity-based costing system, calculate the selling price of one unit
for the model 19 & Model 36? (Marks 5)
Answer:
4. There are advantages and disadvantages to high fixed cost (or low variable cost)
and low fixed cost (or high variable cost) structures. Explain why? (Marks 3)
Answer:
Reference:
Part 2 : Use articles for Zakat & Tax accounting in Saudi Arabia.
Q1. Tax accounting differs from financial accounting in calculating
depreciation expenses for depreciable assets, as the article no. 17 of the
income tax law in Saudi Arabia set rules regarding the calculation of
the depreciation expenses for the depreciable assets.
Required:
a. Summarize the article 17.
b. Give a numerical example to explain how depreciation expense
is calculated
Answer:
3. Give a numerical example on the Tax Base, Article 6 of the law
Answer:
4. Give a numerical example on Losses Carried Forward, Article
21 of the Law, and Article 11 of the Executive Regulations
Answer:
Reference