Acct 301

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
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
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:
10,