Accounting Question

College of Administration and Finance Sciences

Assignment (1)
Deadline: Saturday 12/07/2025 @ 23:59
Course Name: Managerial Accounting

Student’s Name:

Course Code: ACCT322

Student’s ID Number:

Semester: Summer

CRN:
Academic Year: 1446 H

For Instructor’s Use only
Instructor’s Name:
Students’ Grade:

/15

Level of Marks: High/Middle/Low

Instructions – PLEASE READ THEM CAREFULLY
• 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.

College of Administration and Finance Sciences

Assignment Question(s):

(Marks 15)

Q1. Managerial accounting reports provides both objective measures of past operations and
subjective estimates about future decisions. Therefore, management accountants interpret cost
behavior to evaluate and describe accounting systems used for decision making in businesses.
Explain, how management accountants classify costs to interpret cost behavior for decision
making. Give examples. (Marks 3)
Answer:

Q2. ABC Corporation uses process costing. A number of transactions that occurred in June,2018
are listed below. Amounts in SR. (3 marks)
(1) Raw materials that cost 40,000 are withdrawn from the storeroom for use in the Mixing
Department. All of these raw materials are classified as direct materials.
(2) Direct labor costs of 35,000 are incurred, but not yet paid, in the Mixing Department.
(3) Manufacturing overhead of 50,000 is applied in the Mixing Department using the
department’s predetermined overhead rate.
(4) Units with a carrying cost of 115,000 finish processing in the Mixing Department and are
transferred to the Drying Department for further processing.
(5) Units with a carrying cost of 150,000 finish processing in the Drying Department, the final
step in the production process, and are transferred to the finished goods warehouse.
(6) Finished goods with a carrying cost of 140,000 are sold.
Required:
Prepare journal entries for each of the transactions listed above.
Answer:

College of Administration and Finance Sciences

Q3. Najad Corporation manufactures a variety of products. In the past, Najad has been using a
traditional costing system in which the predetermined overhead rate was 150% of direct labor
cost. Selling prices had been set by multiplying total product cost by 200%. Sensing that this
system was distorting costs and selling prices, Najad has decided to switch to an activity-based
costing system for manufacturing overhead costs using three activity cost pools. Selling prices
are still to be set at 200% of unit product cost under the new system. Information on these cost
pools for next year are as follows:

Information (on a per unit basis) related to three popular products at Najad are as follows:

Required:
Under the activity-based costing system, calculate the selling price of one unit for the model 19
& Model36? (Marks 5)
Answer:

Q4. The following is Allison Corporation’s contribution format income statement for last month:
Account title
Amount in SR
Sales
850,000
Variable Cost
250,000
Contribution Margin
600,000
Fixed Expenses
450,000
Net operating Income
150,000

College of Administration and Finance Sciences

The company has no beginning or ending inventories. The company produced and sold
15,000 units last month.
Required: (4 Marks)
i.

Compute Margin of Safety.

ii.

What is the company’s degree of operating leverage?
Answer:

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