Assignment Question(s): (Marks 5)

Q1. DCT Corporation are in the manufacturing of soft drinks and produces three products X, Y and Z. During the year 2014, the joint costs of processing the three products were SAR 450,000. The following are the information related with production and sales value: (1 Mark)

Product	Units	Sales Value at Split-Off	Separable Costs	Selling Price
X	675,000	SAR 25 per unit	SAR 11.00 per unit	SAR 75 per unit
Y	525,000	SAR 21 per unit	SAR 7.00 per unit	SAR 68 per unit
Z	300,000	SAR 17 per unit	SAR 7.00 per unit	SAR 52 per unit

Allocate the joint costs to each product using the physical output method.

Answer:

Q2. What are Non-routine Operating Decisions? Examine any one non-routine operating decision with suitable example and discuss what quantitative and qualitative factors should be considered in making such decision? (1.5 Mark)

Answer:

Q3. ABC Ltd. is preparing a budget for 2015. Following are the information related with budget preparation: (1.5 Mark)

Budgeted selling price per unit = $150 per unit

Total fixed costs = $80,000

Variable costs = $50 per unit

Required:

Prepare flexible budget for 1,200, 1,400, 1,600 and 1,800 units.

Answer:

Q4. Explain with suitable examples why the support department costs are allocated to operating department? Briefly explain any one method of such allocation with numerical examples. (1 Mark)

Answer: