Determine the cost function using Sales ($) as the cost driver.

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 Questions: (Marks 15)
Determine the cost function from the following information using Account Analysis method. (5 Marks)
Suppose Ali Inc. has budgeted next years’ sales at 12,000 units of a product. The selling price per unit is SAR 90, Variable Cost per unit is SAR 30, and Total Fixed Cost is SAR 450,000. (5 Marks)
Akbar Inc. expected to use 25,000 Direct Labour hours this year; overhead is allocated to WIP using Direct Labour Hours. Job # 5 shows total cost of $ 15,000. An inspection reveals that 15% of Job # 5 must be scrapped and sold for $ 200. Job # 5 was originally a batch of 8000 units. (5 Marks)
Expense
Amount
Variable
Fixed
Direct Materials
$400,000
400,000
Direct Labor
200,000
200,000
Rent
25,000
25,000
Insurance
15,000
15,000
Commissions
180,000
180,000
Telephone Expenses
20,000
20,000
Depreciation
70,000
70,000
Power & Light
30,000
30,000
Admin Salaries
40,000
40,000
Additional Information:
1) During the year 100,000 units were produced and sold.
2) Selling price per unit was $ 4.
Required:
Determine the cost function using units produced as the cost driver.
Determine the cost function using Sales ($) as the cost driver.
Determine the Following:
BEP in units
Contribution Margin Ratio
BEP in Sales (SAR)
Margin of Safety Percentage
Degree of Operating Leverage

Requirement:
Prepare Journal Entry to record the spoilage and the sale of the scrap if the spoilage is considered normal and is not due to the demanding specification of Job # 5.
Determine the manufacturing cost per units for the good units in Job # 5, if the spoilage is considered normal and is not due to the demanding specification of Job # 5.
Prepare Journal Entry to record the spoilage and the sale of the scrap if the spoilage is considered abnormal and occurred due to the demanding specification of Job # 5.

Determine the manufacturing cost per units for the good units in Job # 5, if the spoilage is considered abnormal and occurred due to the demanding specification of Job # 5.

Last Completed Projects