Description
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.
other resources without proper referencing will result in ZERO marks. No exceptions.
No pictures containing text will be accepted and will be considered plagiarism.
Assignment (2)
Deadline: Thursday 27/11/2025 @ 23:59
Course Name: Cost Accounting
Student’s Name:
Course Code: ACCT 301
Student’s ID Number:
Semester: 1st Semester
CRN:
Academic Year: 1447 H
(2025-26)
For Instructor’s Use only
Instructor’s Name: Rabab Farrash
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.
Restricted – مقيد
College of Administration and Finance Sciences
Assignment Questions:
(Marks 15)
1. Metro Toys are making two types of toys namely ‘Supreme’ and ‘Deluxe’.
Metro Toys has only 200,000 machine hours available per year. The following
information is provided for both the products.
Supreme
Deluxe
Selling Price per unit
SAR 50
SAR 30
Variable Cost Per Unit
SAR 25
SAR 10
8
2
Required Machine Hours/Unit
Required:
a) Determine the Total Contribution Margin in SAR if Only ‘Deluxe’ Toys are
produced.
(2.5 Marks)
b) Determine the Total Contribution Margin in SAR if Only ‘Supreme’ Toys
are produced.
(2.5 Marks)
Solution:
2. Akbar Inc. has two support departments (Accounting and Information
Technology) and Two Operating Departments of Producing Plastic Products and
Metal Products. The cost information of all these departments and allocation
bases are given below:
Support Department
Restricted – مقيد
Operating Department
College of Administration and Finance Sciences
Accounting
Cost
40,000
Information
Plastic
Metal
Total
Technology
Products
Products
64,000
120,000
160,000
384,000
(SAR)
Possible Allocation Bases:
No. of
Support Department
Operating Department
Accounting
Information
Plastic
Metal
Technology
Products
Products
Total
5
8
15
25
53
24
36
320
480
860
Employees
No. of
Computers
Accounting Department’s Cost will be allocated using number of employees and
Information Technology Department’s cost will be allocated using number of
computers.
Required:
Allocate the Support Department Cost to Operating Department using Direct
Method.
(Step by Step Calculation is required).
(5 Marks)
Note: Show your solution through table.
Solution:
3. Freshly Juice company produces three products differently. These products are
jointly produced upto certain stage and then after they are identified separately.
The joint cost of processing these products are SAR 160,000. You are required to
Restricted – مقيد
College of Administration and Finance Sciences
allocate this Joint Cost among the three different product by using the following
methods.
a) Sales Value at Split Off Method
b) Net Realizable Value (NRV) Method
(2.5 Marks)
(2.5 Marks)
The quantitative information of these products are as follows:
Products
A
B
C
KG Produced Selling Price
Per KG at
Split Off
20,000
SAR 1.2
40,000
SAR 1.4
80,000
SAR 0.8
Note: Show your solution through table.
Solution:
Restricted – مقيد
Final Sale
Value
Separable
Cost
70,000
94,000
80,000
6,000
9,000
10,000
College of Administration and Finance Sciences
Assignment (2)
…ادعو البوي بالرحمة والمغفرة
Course Name: Cost Accounting
Student’s Name:
Course Code: ACCT 301
Student’s ID Number:
Semester: 1st Semester
CRN:
Academic Year: 1447 H
(2025-26)
For Instructor’s Use only
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.
SA.
Restricted – مقيد
College of Administration and Finance Sciences
Assignment Questions:
(Marks 15)
1. Metro Toys are making two types of toys namely ‘Supreme’ and ‘Deluxe’.
Metro Toys has only 200,000 machine hours available per year. The following
information is provided for both the products.
Supreme
Deluxe
Selling Price per unit
SAR 50
SAR 30
Variable Cost Per Unit
SAR 25
SAR 10
8
2
Required Machine Hours/Unit
Required:
a) Determine the Total Contribution Margin in SAR if Only ‘Deluxe’ Toys are
produced.
(2.5 Marks)
b) Determine the Total Contribution Margin in SAR if Only ‘Supreme’ Toys
are produced.
(2.5 Marks)
SA.
Restricted – مقيد
College of Administration and Finance Sciences
Solution:
Supreme
Deluxe
Selling Price per unit
SAR 50
SAR 30
Variable Cost Per Unit
SAR 25
SAR 10
Contribution Margin per unit
SAR 25
SAR 20
8
2
Required Machine
Hours/Unit
a. The machine hour constraint is: 8S + 2D ≤ 200,000 machine hours
If D=0, this constraint becomes 8S ≤ 200,000 machine hours or S ≤ 25,000
TCM = 25*25,000= SAR 625,000
b. The machine hour constraint is: 8S + 2D ≤ 200,000 machine hours
If S=0, this constraint becomes 2D ≤ 200,000 machine hours or D ≤ 100,000
TCM = 20*100,000= SAR 2,000,000
SA.
Restricted – مقيد
College of Administration and Finance Sciences
2. Akbar Inc. has two support departments (Accounting and Information
Technology) and Two Operating Departments of Producing Plastic Products and
Metal Products. The cost information of all these departments and allocation
bases are given below:
Cost
Support Department
Operating Department
Accounting
Information
Plastic
Metal
Technology
Products
Products
64,000
120,000
160,000
40,000
Total
384,000
(SAR)
Possible Allocation Bases:
No. of
Support Department
Operating Department
Accounting
Information
Plastic
Metal
Technology
Products
Products
Total
5
8
15
25
53
24
36
320
480
860
Employees
No. of
Computers
Accounting Department’s Cost will be allocated using number of employees and
Information Technology Department’s cost will be allocated using number of
computers.
Required:
Allocate the Support Department Cost to Operating Department using Direct
Method.
(Step by Step Calculation is required).
(5 Marks)
Note: Show your solution through table.
SA.
Restricted – مقيد
College of Administration and Finance Sciences
Solution:
In the Direct Method of cost allocation, both the Accounting and Information Technology (IT)
department costs are distributed to the Operating departments (Plastic Products and Metal
Products) based on two different factors: number of employees for Accounting and number
of computers for IT.
1. Accounting Department’s Costs:
o
The costs are allocated based on the number of employees in each department.
o
Plastic Products: 22 employees out of a total of 38 employees (22 + 16).
o
Metal Products: 16 employees out of a total of 38 employees.
2. Information Technology Department’s Costs:
o
The costs are allocated based on the number of computers in each department.
o
Plastic Products: 320 computers out of a total of 800 computers (320 + 480).
o
Metal Products: 480 computers out of a total of 800 computers.
Support Department
Information
Plastic
Metal
Technology
Products
Products
40,000
64,000
120,000
160,000
384,000
5
8
15
25
53
24
36
320
480
860
Accounting
Cost (SAR)
No. of
Employees
No. of
Computers
Operating Department
Total
Allocated costs:
Accounting
Information
(SAR 64,000)
Technology
Total
40,000*0.375 40,000*0.625
(SAR 40,000)
SAR 0
SAR 0
= SAR 15,000
= SAR 25,000
64,000*0.4
64,000*0.6
= SAR 25,600
= SAR 38,400
SAR 160,600
SAR 223,400
SAR 0
SAR 0
SAR 384,000
SA.
Restricted – مقيد
College of Administration and Finance Sciences
3. Freshly Juice company produces three products differently. These products are
jointly produced upto certain stage and then after they are identified separately.
The joint cost of processing these products are SAR 160,000. You are required to
allocate this Joint Cost among the three different product by using the following
methods.
a) Sales Value at Split Off Method
b) Net Realizable Value (NRV) Method
(2.5 Marks)
(2.5 Marks)
The quantitative information of these products are as follows:
Products
A
B
C
KG Produced Selling Price
Per KG at
Split Off
20,000
SAR 1.2
40,000
SAR 1.4
80,000
SAR 0.8
Final Sale
Value
Separable
Cost
70,000
94,000
80,000
6,000
9,000
10,000
Solution:
A) The sales value at split-off method is commonly applied when all the products are sold at the
split-off point, which is the stage in the production process where the joint products are first
identified as separate products. This method assigns costs to the products based on their
individual sales values at this point of separation.
Selling Price
Total Sales
Per KG at Split Value at SplitOff
Off
Products
KG
Produced
A
20,000
SAR 1.2
B
40,000
C
80,000
140,000
Relative Sales
Value
Allocated
Joint Costs
24,000
16.67%
26,672
SAR 1.4
56,000
38.89%
62,224
SAR 0.8
64,000
44.44%
71,104
144,000
100%
160,000
SA.
Restricted – مقيد
College of Administration and Finance Sciences
B) The net realizable value (NRV) method is used when the products are not immediately sold at
split-off but require further processing. NRV is calculated by subtracting the separable costs
(the costs incurred to further process the products) from the final selling price of the product.
This method is useful for allocating joint costs to products based on their expected profitability
after additional processing.
Final Sale
Products
Value
Separable Cost
NRV
Relative NRV
Allocated
Joint Costs
A
70,000
6,000
64,000
29.2%
46,720
B
94,000
9,000
85,000
38.8%
62,080
C
80,000
10,000
70,000
32.0%
51,200
244,000
25,000
219,000
100%
160,000
SA.
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