Explain with suitable examples why the support department costs are allocated to operating department?                                                                                                                                                    

Assignment (3)

Deadline: Saturday 27/11/2021 @ 23:59

Course Name: Cost Accounting	Student’s Name:
Course Code: ACCT 301	Student’s ID Number:
Semester: 1st	CRN:
Academic Year: 1443 H

For Instructor’s Use only

Instructor’s Name:
Students’ Grade:           /5	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.

Assignment Question(s):                                                                   (Marks 5)

Q1.  DCT Corporation are in the manufacturing of soft drinks and produces three products X, Y and Z. During the year 2014, the joint costs of processing the three products were SAR 450,000. The following are the information related with production and sales value:                   (1 Mark)

Product	Units	Sales Value at Split-Off	Separable Costs	Selling Price
X	675,000	SAR 25 per unit	SAR 11.00 per unit	SAR 75 per unit
Y	525,000	SAR 21 per unit	SAR 7.00 per unit	SAR 68 per unit
Z	300,000	SAR 17 per unit	SAR 7.00 per unit	SAR 52 per unit

Allocate the joint costs to each product using the physical output method.  

Answer:

Q2. What are “Non-routine Operating Decisions?” Examine any one non-routine operating decision with suitable example and discuss what quantitative and qualitative factors should be considered in making such decision?                                                                                     (1.5 Mark)

Answer:

Q3. ABC Ltd. is preparing a budget for 2015. Following are the information related with budget preparation:                                                                                                                            (1.5 Mark)

Budgeted selling price per unit        =          $150 per unit

Total fixed costs                                =          $80,000

Variable costs                                    =          $50 per unit

Required:

Prepare flexible budget for 1,200, 1,400, 1,600 and 1,800 units.

Answer:

Q4. Explain with suitable examples why the support department costs are allocated to operating department? Briefly explain any one method of such allocation with numerical examples.                                                                                                                                                       (1 Mark)

Answer: