ACCT 301: Cost accounting
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ACCT301.docxAssignment 2 ACCT 301: Cost accounting
Last Date for Submission 28 October 2017
You are required to work in this assignment individually.
Any suspicious activities or cheating will result zero grade in this assignment.
|
Assignment |
2 |
Marks |
10 |
|
Course Title |
Cost Accounting |
Code |
ACCT 301 |
|
Uploading |
End week 5 |
Submission |
End week 6 |
|
Date |
Sat 21/10/2017 |
Dates |
Sat 28/10/2017 |
Assignment 2 is covering week 4 and week 5 materials:
Week 4 materials: CVP Analysis
Week 5 materials: Job costing
Q 1 Cost-Volume-Profit analysis (CVP):
Analyze the three following graphs. Explain how these graphs will be useful for managers. Discuss the other uses of CVP Analysis.
Discuss the basic assumptions for CVP analysis
Q 2 SABIC is developing a cost function for its maintenance costs using the high-low method. The following data have been collected for the past year:
Direct Labor Maintenance
Quarter Hours Costs Incurred
1 5,000 $ 745
2 6,500 820
3 7,000 850
4 8,000 1,000
Calculate the following amounts:
a.The variable cost per direct labor hour
b.The fixed cost
c.The estimated total cost for 9,000 direct labor hours
d.The estimated total cost for 6,000 direct labor hours
Q 3. Prepare Journal Entries from the following information relating to Job Costing.
a) The material storeroom receives a shipment of direct and indirect materials that cost $ 12,000.
b) Materials are sent to the stamping and assembly areas. The Cost of the direct materials is $ 1,500 and the cost of the indirect materials is $ 900.
c) Wages totalling $ 2,000 are accrued; 80 % of these costs are direct labour and 20% are indirect labour.
d) Overhead costs are allocated to work in process using an allocation rate of 150% of direct labour costs.
e) Job No. 1205, with a total cost of $ 2,500 is completed.
f) Job No. 1205 is shipped to the customer, who is billed for $ 5,000.
Q.4 (A) How is overhead cost allocated in job costing?
(B) Discuss the Treatment of Normal an Abnormal Spoilage under Job Costing.
Q 5 The salespersons in Omar Co. have total salaries of $140,000 (included in F of $600,000) and earn a 5% commission on each mobile phone ($30 included in V). The alternative plan was to decrease salaries to $60,000 and increase the commission to 18% ($110 per mobile phone).
A. Compute the BEP in units under the proposed alternative.
P = $600 and V = $320.
B. Compute the volume of sales, in units, for which Omar Co. is indifferent between the two alternatives.
C. Draw a CVP graph for Omar Co. that displays the costs under both alternatives.
