# Cost Accounting Worksheet

Description

Q 1 The accountant for Kadhim Inc. is preparing the budgets for operating department support service costs.Maintenance costs are allocated based on square feet, and cafeteria costs are allocated based on number of employees. The following data have been collected: Support DepartmentsOperating Departments MaintenanceCafeteriaCutting Packaging Direct costsSAR50,000SAR45,000SAR275,000SAR300,000 Number of employees1510150 250 Square feet1,5002,0003,500 4,000 If the direct method is used, calculate maintenance costs allocated to the cutting department? If the direct method is used, calculate the total cost (including allocations) for the packaging department? Assume you are working for the organization and are requested to allocate support department costs.Describe how you would choose the best method? ( 2 marks) Answer: Q 2 Khaleel Compagny produces three products A, B and C.During the year the joint costs of processing the coffee were SAR270,000.Production and sales value information were as follows: Sales Value ProductUnitsat Split-OffSeparable CostsSelling Price A300,000 SAR9 per unit SAR5.00 per unit SAR32 per unit B200,000 SAR8 per unit SAR3.00 per unit SAR30 per unit C400,000 SAR7 per unit SAR2.00 per unit SAR20 per unit Chose one method to allocate joint costs and allocate the joint costs.(1 mark) Answer Q 3In a recent accounting period, Ismail Company experienced a SAR30,000 unfavorable variance for variable production costs.Explain the meaning of an unfavorable variance. Suggest two possible (1 mark) Answer Q 4How are budgets related to organizational strategies? (1 mark) Answer

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College of Administrative and Financial Sciences
Assignment 3
Course Name: Cost accounting
Student’s Name:
Course Code: ACCT 301
Student’s ID Number:
Semester: 2
CRN: 21927
For Instructor’s Use only
Instructor’s Name: Dr. Shahid Husain
/5
Level of Marks:
Instructions

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 answered 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.
Page 1 of 3
Q 1 The accountant for Kadhim Inc. is preparing the budgets for operating department
support service costs. Maintenance costs are allocated based on square feet, and
cafeteria costs are allocated based on number of employees. The following data have
been collected:
Support Departments
Maintenance
Direct costs
Square feet
Cafeteria
SAR50,000 SAR45,000
Number of employees
Operating Departments
Cutting
SAR275,000
Packaging
SAR300,000
15
10
150
250
1,500
2,000
3,500
4,000
a- If the direct method is used, calculate maintenance costs allocated to the cutting
department?
b- If the direct method is used, calculate the total cost (including allocations) for the
packaging department?
c- Assume you are working for the organization and are requested to allocate support
department costs. Describe how you would choose the best method? ( 2 marks)
Q 2 Khaleel Compagny produces three products A, B and C. During the year the joint costs
of processing the coffee were SAR270,000. Production and sales value information were as
follows:
Sales Value
Product
Units
at Split-Off
Separable Costs
Selling Price
A
300,000
SAR9 per unit
SAR5.00 per unit
SAR32 per unit
B
200,000
SAR8 per unit
SAR3.00 per unit
SAR30 per unit
C
400,000
SAR7 per unit
SAR2.00 per unit
SAR20 per unit
Chose one method to allocate joint costs and allocate the joint costs.
Page 2 of 3
(1 mark)
Q3
In a recent accounting period, Ismail Company experienced a SAR30,000 unfavorable
variance for variable production costs. Explain the meaning of an unfavorable variance.
Suggest two possible (1 mark)
Q4
How are budgets related to organizational strategies? (1 mark)
Page 3 of 3

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