Cost allocation - Decisions - Budget

ACCT 301 Cost Accounting

Task:

Assignment Question(s):

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:

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.

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?

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

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.

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.

Get instant help from 5000+ experts for