ACCT 301 Saudi Electronic University Cost Accounting Worksheet

• 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.

Q 1 The accountant for Kadhim Inc. is preparing the budgets for operating department support service costs.Maintenance costs are allocated based on square feet, and cafeteria costs are allocated based on number of employees. The following data have been collected:

Support DepartmentsOperating Departments

MaintenanceCafeteriaCutting Packaging

Direct costsSAR50,000SAR45,000 SAR275,000 SAR300,000

Number of employees1510150 250

Square feet1,5002,0003,500 4,000

• If the direct method is used, calculate maintenance costs allocated to the cutting department?
• If the direct method is used, calculate the total cost (including allocations) for the

packaging department?

• Assume you are working for the organization and are requested to allocate support

department costs.Describe how you would choose the best method?

( 2 marks)

Answer

Q 2 Khaleel Compagny produces three products A, B and C.During the year the joint costs of processing the coffee were SAR270,000.Production and sales value information were as follows:

Sales Value

ProductUnitsat Split-OffSeparable CostsSelling Price

A300,000 SAR9 per unit SAR5.00 per unit SAR32 per unit

B200,000 SAR8 per unit SAR3.00 per unit SAR30 per unit

C400,000 SAR7 per unit SAR2.00 per unit SAR20 per unit

Chose one method to allocate joint costs and allocate the joint costs.(1 mark)

Answer

Q 3In a recent accounting period, Ismail Company experienced a SAR30,000 unfavorable variance for variable production costs.Explain the meaning of an unfavorable variance.Suggest two possible (1 mark)

Answer

Q 4How are budgets related to organizational strategies? (1 mark)

Answer