College of Administration and Finance Sciences

Assignment (2)
Deadline: Saturday 04/05/2024 @ 23:59

Course Name: Cost Accounting Student’s Name:

Course Code: ACCT 301 Student’s ID Number:
Semester: Second CRN:
Academic Year: 1445 H

For Instructor’s Use only

Instructor’s Name: Amal Alshangiti
Students’ Grade: /15 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.
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Assignment Question(s): (Marks 15)

Q1. What is the process of identifying activities in an organisation and assigning costs under
the Activity Based Costing (ABC) system? Elucidate. You will need to include the right
numerical examples to support your answer. (2 Marks)
(Chapter 7, Week 7)

Answer:

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

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Number of computers 15 20 24 28

You are required to allocate variable and fixed costs using direct method.
Answer:

Q3. What are an organization's “outsourcing decisions” and “constrained resource decisions?”
Provide a suitable numerical example of these decisions and explain how quantitative and
qualitative considerations support a company's decision-making process.

(2 Marks) (Chapter 4, Week

9)

Note: Your answer must include suitable numerical examples. You are required to assume values
of your own, and they should not be copied from any sources.

Answer:

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
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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 10, 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:
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