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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 answered
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.
Questions
Q 1 Give a numerical example of non-routine decision, Determine the
relevant costs for this non-routine decision and discuss the analysis
(quantitative and qualitative) required to make the decision? (1.5
Marks)
Q 2 Which types of companies would most likely use a process
costing system? Provide examples of two Saudi Companies.
Explain the methods with which the cost per unit will be calculated
for this type of companies. Explain how
the different items of inventory will be evaluated? (1.5 Marks)
Q 3 KLM Company has two departments, Assembly and Testing. You are given the following information about
the costs of 5 activities that occur at the manufacturing plant monthly:
Activity Total Costs Total number of units of Cost Driver
Material handling SAR200, 000 400,000 parts
Supervision of direct labor 126,000 90
employees
Janitorial and cleaning 200,000 4,000 hours
Machining 300,000 7,000 machine hours
Total costs SAR826,000
The above activities are used by the two departments as follows:
Assembly Testing
Material
handling 200,000 parts 200,000 parts
Supervision
of direct labor 40 Employees 50 employees
Time
spent cleaning 2,000 hours 2,000 hours
Number
of machine hours 5,000 machine hours 2,000 machine hours
a. How much of the material handling cost will
be allocated to Assembly?
b. What is the ABC allocation rate for
supervision of direct labor?
(2 Marks)
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