Cost Accounting

Assignment (1)

Course Name: Cost Accounting	Student’s Name:
Course Code: ACCT 301	Student’s ID Number:
Semester: 1st	CRN:
Academic Year: 1445 H

For Instructor’s Use only

Instructor’s Name:
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.

Assignment Question(s):                                                               (Marks 15)

Q1. “Strategic management and decision-making are fundamental elements in the effective operation of an organization.” Discuss this statement considering the process of strategic management and decision-making. Provide an example of one Saudi Company to support your answer.                                                                                                                                     (3 Marks)

Note: Your answer must include a suitable example showing the process of strategic management and decision-making.                                                                                                            (Chapter 1)

Answer:

Q2. The following details were extracted from the records of KCL Company for the year 2020: 

                                                                                                                                                 (4 Marks)

Month	Units Produced	Total Cost (SAR)
March	40,000	405,000
April	42,000	408,000
May	45,000	410,000
June	47,000	414,000
July	51,000	503,000
August	54,000	524,000
September	32,000	370,000
October	38,000	375,000

Required:

1. Using the high-low analysis method, find out variable and fixed costs and determine a cost function.
2. Take the data for July and August and using the two-point method, find out variable and fixed costs and determine a cost function.                                                                

                                                                                                                                   (Chapter 2)

Answer:

Q3. A&T Company makes a product that sells for SAR 300 per unit. The other details related to this product are as follows:                                                                                               (4 Marks)

Variable costs = SAR 60 per unit

Fixed costs = SAR 144,000

You are required to calculate:

1. Contribution margin per unit and contribution margin ratio.
2. Break-even point in units and sales SAR.
3. Pretax profit if the company sells 1200 units.
4. Units needed to reach target pretax profit of SAR 120,000.
5. Sales SAR needed to reach the target pretax profit of SAR 120,000.
6. The margin of safety in units for budgeted next year’s sales at 1,800 units.
7. The margin of safety in SAR for budgeted next year’s sales at 1,800 units.

                                                                                                                                              (Chapter 3)

Answer:

Q4. a) How is job costing used in the service sector and manufacturing sector?              (1 Marks)

 b) Referring to the concept of job costing in the manufacturing sector, what are the journal entries a manufacturing company must record to show the flow of costs? Explain and analyze your answer by providing examples of one Saudi company that uses job costing.          (3 Marks)

Note: Your answer must include a suitable example showing all the necessary journal entries.      

                                                                                                                                               (Chapter 5)                                                                                                     Answer: