Acct301 assignment 2
Assignment (2)
Assignment Question(s): (Marks 15)
Q1. What are non-routine operating decisions? Explain with suitable numerical examples how companies decide to take the following decisions: (3 Marks)
- Keep or drop decisions
- Constrained Resource Decisions (Two Products; One Scarce Resource)
Note: Your answer must include numerical examples for these two decisions. You are required to assume values of your own and they should not be copied from any sources.
(Chapter 4)
Answer:
Q2. a) What are the differences between single and dual rate allocation? Explain with suitable examples. (2 Marks)
b) Provide a numerical example for single rate allocation and dual rate allocation and explain the process of allocating support department costs to the operating department, assuming that:
- The company has two support departments “S1 & S2” and two operating departments “O1 & O2.”
- The company use the direct method to allocate support department costs. (2 Marks)
Note: You are required to provide numerical examples assuming the values of your own and they should not be copied from any sources. (Chapter 8)
Answer:
Q3. OFL Ltd. manufactures plastic products and makes three products, P1, P2 and P3. In 2016, the joint costs of three products were SAR 135,000. Following are the details related to the number of units and selling price per unit: (4 Marks)
| Product | Units | Selling Price per unit |
| P1 | 6,000 | SAR 30 |
| P2 | 3,000 | SAR 20 |
| P3 | 1,000 | SAR 15 |
Allocate the joint costs to each product using: (Chapter 9)
- Physical volume method
- Sales value at the split-off method
Answer:
Q4. The following data are related to FDL Company for the year 2017: (4 Marks)
Budgeted selling price per unit = SAR 425 per unit
Total fixed costs = SAR 84,000
Variable costs = SAR 110 per unit
You are required to prepare a flexible budget for 400, 500, 600 and 700 units. (Chapter 10)
Answer:
