Assignment Question(s): (Marks 15)
Q1. Assume yourself to be a cost manager of SABIC industries and you are tin the task of cost classifications for predicting cost behavior. Explain any three (3) approaches (with examples), you would apply in in predicting or estimating the future cost of the organization. (3 MARKS)
Answer:
Q2: A Manufacturing Company completed Job 1 and 2 in March2022 and the company uses job-costing system under normal costing to apply manufacturing overhead using Direct Labor hours. The cost details of Job 1and 2 are given below.
(4 MARKS)
| Title | Job 1 | Job 2 |
| Direct labor cost | SAR 15,000 | 20,000 |
| Direct materials cost | SAR 35,000 | 25,000 |
| Machine hours used | 10 | 15 |
| Direct labor hours | 30 | 20 |
| POHR as per direct labor hour | SR 50 | SR50 |
Required: Calculate the total job cost for Job 1 and 2
Answer
Q3.a. Latif Company has two products: A and B. The company uses activity-based costing. The estimated total cost and expected activity for each of the company’s three activity cost pools are as follows:
Required:
- Compute POHR per activity (Round off to two decimal places)
- Calculate the overhead cost per unit, if the company produces 1,000 units of product A and 500 units of product B. (6 MARKS)
Answer:
- Some scientists’ belief that costs of implementing an ABC system may outweigh the benefits. However, there are reasons justifying costs. List 4 reasons. (2 MARKS)
Answer:
Q4. Explain Equivalent Units of Production and its computation using weighted average method and FIFO method. (2 MARKS)
Answer
Q5 T Corporation produces and sells a single product. Its selling price is SAR15 per unit, and variable cost per unit is SAR12. Total fixed costs are SAR3, 000.
- What is T Corporation’s contribution margin per unit?
- Calculate the breakeven point in units.
- How many units must T Corporation sell for a profit of SAR10, 000?
(3 MARKS)
