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Assignment Question(s): (Marks 15)
Q1. What information is relevant for decision-making? Differentiate between relevant and irrelevant information for decision-making. Support your answer by explaining the information in the context of an organization. (3 Marks)
Note: Your answer must include suitable examples of relevant and irrelevant information for decision-making. (Week 2, Chapter 1)
Answer:
Q2. A&D Ltd. is in the manufacturing of wooden products and makes several wooden items. The following values are related to a particular wooden item:
Particulars
Selling price per unit
SAR 1,100
Variable cost per unit
SAR 400
Total fixed costs
SAR 500,000
Estimated next year’s budgeted sales
1,200 units
You are required to calculate: (4 Marks)
a)BEP in units and BEP in sales SAR
b)Degree of operating leverage
c)Margin of safety in units
d)Margin of safety in SAR (Week 4, Chapter 3)
Answer:
Q3. The information below was derived from the 2018 records of HCS Company: (4 Marks)
Month
Units Produced
Total Cost (SAR)
May
4,350
44,200
June
4,700
44,700
July
5,000
45,000
August
5,400
45,400
September
5,650
47,500
October
5,900
57,150
November
3,450
40,000
December
4,100
40,600
Using the high-low method of analysis, calculate
i.Variable cost
ii.Fixed cost, and
iii.Determine a cost function. (Week 3, Chapter 2)
Answer:
Q4. The following transactions are related to a particular job. You are required to make the necessary journal entries. (4 Marks)
a)The materials storeroom receives a shipment of direct and indirect materials that cost SAR 50,000.
b)Materials are sent to the stamping and assembly areas. The cost of the direct materials is SAR 5,600 and the cost of the indirect materials is SAR 3,200.
c)Wages totaling SAR 7,000 are accrued; 60% of these costs are direct labor and 40% are indirect labor.
d)Overhead costs are allocated to work in process using an allocation rate of 250% of direct labor costs.
e)Job no. 25, with a total cost of SAR 8,500 is completed.
f)Job no. 25 is shipped to the customer, who is billed for SAR 15,000.
(Week 5, Chapter 5)
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