Cost Accounting ACCT 301

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Q 1 Give a numerical example of non routine decision, Determine the relevant costs for this non routine decision and discuss the analysis (quantitative and qualitative) required to make the decision?

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Q 2 Which types of companies would most likely use a process costing system? Provide examples of two Saudi Compagnies.

Explain the methods with which the cost per unit will be calculated for this type of companies.Explain how the different items of inventory will be evaluated?

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Q 3 KLM Compagny has two departments, Assembly and Testing.You are given the following information about the costs of 5 activities that occur at the manufacturing plant monthly:

ActivityTotal CostsTotal number ofunits of Cost Driver

Material handlingSAR200, 000400,000 parts

Supervision of direct labor126,00090 employees

Janitorial and cleaning200,0004,000 hours

Machining300,0007,000 machine hours

Total costsSAR826,000

The above activities are used by the two departments as follows:

AssemblyTesting

Material handling200,000 parts200,000 parts

Supervision of direct labor40 employees50 employees

Time spent cleaning2,000 hours2,000 hours

Number of machine hours5,000 machine hours2,000 machine hours

a. How much of the material handling cost will be allocated to Assembly?

b. What is the ABC allocation rate for supervision of direct labor?

( 2 Marks)

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