systems personnel fruit nut information sy stems hours used 600 600 720 480 number B u s i n e s s F i n a n c e

* Assume there were 6,000 units in beginning work in process, 60% complete. 20,000 units were completed during the month. Ending work in process is 40% complete, which is equivalent to 3,200 units for conversion costs. Materials are added at the beginning of the process. The FIFO method is used. 1- The number of equivalent units of conversion costs is? 2- The number of units started this month is?

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* Ali Company produces product XYZ that sell for $200.

The variable costs per unit are $80, and the total fixed costs are $360,000.

The BEP in units for this company is?

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* Saad Manufacturing uses job costing and applies overhead using a normal costing system

using direct labor hours as the allocation base. The estimated overhead cost is SAR400,000,

estimated direct labor cost is SAR500,000 and estimated direct labor hours are 25,000.

What is the estimated rate of allocation of overhead?

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* Suppose Price per unit = $200, Variable cost per unit = $80, and Fixed costs = $360,000.

How many units does the company need to sell to reach a target pretax profit of $240,000?

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* Costs assigned to an activity pool for teaching children to swim at the county park are

$2,700 per month. Number of students is chosen as the cost driver. On average, 300

students take swim lessons monthly. What is the ABC allocation rate for this activity?

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* Amal Company is attempting to develop the cost function for total costs. The following past

data are available:

Units Total Costs

4,800 SAR 6, 3 85

3,400 4,585

4,000 5,285

5,900 7,085

Using the high-low method, what is the variable cost per unit?

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* Suppose final sales value of one product is $180,000 and separable costs are $60,000. The

net realizable value is?

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* Maintenance is a support department for which costs is allocated based on square feet, and

cafeteria

is a support department for which costs are allocated based on number of employees.

Number of square feet for cafeteria is 2,000, for Operating department 1 is

3,500 and for Operating department 2 is 4,000. If the direct method is used, maintenance

costs allocated to the cafeteria will be?

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* XYZ Corp uses job costing and applies overhead using a normal costing system and uses

direct labor hours as the allocation base. This period’s estimated overhead cost is SAR300,000 and estimated direct labor cost of SAR200, 000 and 10,000 direct labor hours.

Direct Direct Direct

Materials Labor Cost Labor Hours

Job 600 SAR 2,000 SAR 4,200 70

Job 601 800 600 30

Job 602 40,000 5,700 80

What is the total manufacturing cost of Job 601?

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* An organization’s accountant is estimating next period’s total costs. He performed two

regression analyses, one based on direct labor hours and the other based on machine hours.

The results were:

Total cost = SAR180, 000 + SAR 6 x direct labor hours

Adjusted R-square = 0.60

Total cost = SAR120, 000 + SAR4 x machine hours

Adjusted R-square = 0.80

For the next period the accountant anticipates using 28,000 direct

labor hours and 30,000 machine hours. Based upon this information, what is the best estimate for the cost for the next period?

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* Suppose Price per unit = $200, Variable cost per unit = $80, and Fixed costs = $360,000.

How many

units does the compagny need to sell to reach a target pretax profit of $240,000?

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* Mohamad Co. sells product P at a price of SR 60 a unit. The per-unit cost data are: direct

materials SR 19, direct labor SR 20, and overhead SR10 (20% fixed and 80% variable).

Mohamad has sufficient capacity to accept a special order for 40,000 units just received.

Selling costs associated with this order would be SR 7 per unit. The

minimum selling price per unit should be?

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* ABC Enterprises produces a main product and one by-product in a joint process. The joint

costs totaled $480,000. The main product sells for $10/unit and the by-product sells for

$1/unit.

Number of units of by – products produced is 10,000 units and number of units of main

product produced is 100,000 units. Using the NRV, the production cost per unit for the main product is?

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* Ayman Company’s projected sales for January are 40,000 units and for February 60,000

units. Beginning inventory for the year is 30,000 units. Ending inventory for each month

should be 30% of the next month’s sales. How many units should the company produce in January?

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* ABC Enterprises produces a main product and one by-product in a joint process. The joint

costs totaled $480,000. The main product sells for $10/unit and the by-product sells for $1/unit.

Number of units of by – products produced is 10,000 units and number of units of main product produced is 100,000 units. Using the NRV, the production cost per unit for the main product is?

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* Abdulrahman Company is developing a cost function for its total costs using the high-low method.

The following data have been collected for the past year:

Number of units produced

Quarter Total Costs

1) 5,000 SAR 850

2) 6,500 925

3) 7,000 950

4) 8,000 1,000

Calculate the following amounts:

a. The variable cost per unit

b. The fixed cost

c. The estimated total cost for 9,000 units

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* Here is information for Mohammed Manufacturing Actual direct labor hours worked 20,000 Standard direct labor hours for units produced 2 2,000 Actual variable overhead costs incurred $24,000 Variable overhead efficiency variance $2,500 favorable Standard variable overhead allocation rate per direct labor hour $1.25

find:

A. Variable overhead spending variance

B. Variable overhead allocated

C. Actual variable overhead per direct labor hour

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* Yasser Company’s projected profit for the coming year is as follows:

Sales SAR 200,000 with Price per unit SAR 20, Total Variable cost SAR

120,000 with Variable cost per unit SAR 12 and fixed expenses are SAR

64,000

Required:

a. Comp ute the break-even point in units.

b. How many units must be sold to earn a profit of SAR 30,000?

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* Ahmad Division had the following information.

Operating income $ 50,000 Adjusted after-tax operating income 35,000

Adjusted total assets 80,000

Average operating assets 90,000

Current liabilities 15,000

Revenue 120,000

Weighted average cost of capital 10%

from the list calculate:

a. return on investment

b. residual income

c. economic value added

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* The total cost to produce 10,000 units is SAR 880000, and the total cost to produce 15,000

units is

SAR 1,260000.

Required:

a. Develop a cost function for this cost.

b. Estimate the total cost to produce 18,000 units.

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* Abdullah Motors manufactures cars and currently uses only 50% of its manufacturing

facility (20,000 cars). The company could utilize more of its facility by producing its own tires

and using the total capacity. It currently purchases tires at $30 per unit. Abdullah would incur

$12 per unit for direct materials, $10 for direct labor, and $24 for overhead (which is 30%

variable) if it produces the tires.

a. Should Abdullah Motors make or buy the tires? Provide calculations that support your answer.

b. Suppose Abdullah Motors could rent the unused portion of its plant and receive $1,500 a

month. Should the company make or buy the tires?

Provide calculations that support your answer

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* Breakfast Bars has two support departments, Information Systems and Personnel. The Information Systems Department costs of $120,000 are allocated on the basis of hours used. The Personnel Department costs of $30,000 are allocated based on the number of employees. Costs of the two operating departments are $60,000 for Fruit Bars and $90,000 for Nut Bars. Data on information systems hours used and number of employees are as follows:

Information Allocation Bases: Systems Personnel Fruit

Nut Information sy stems hours used 600 600 720 480

Number of employees 10 20 40 120 What is the cost of the Information Systems Department

allocated to Fruit using the direct method?

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