Q1. Jassim Compagny is producing only one product. Two types of direct materials are used to produce
Question:
Q1. Jassim Compagny is producing only one product. Two types of direct materials are used to produce this product: direct material type( A) and direct material type B.
The estimated data for Jassim Compagny is as following:
Sales $90,000
Costs:
Direct materials type (A) $40,000
Hourly employees 15,000
Manager's salary 10,000
Direct materials type B 5,000
Marketing 10,000
Total Costs 80,000
Budgeted pretax profit $ 10,000
a. Compute the revenues needed to achieve a target after-tax income of $30,000. The income tax rate is 20%.
b. What is the margin of safety in revenue?
(Ch 3 )
Answer
Q2 Abdulwahab Corporation is estimating the cost function for total cost of production of product A using the high-low method. The data collected for the past year is as following:
Number of units Total
Quarter produced Costs
1 4,000 $ 1,000
2 5,400 1,280
3 7,000 1,600
4 9,000 2,000
Calculate the following amounts: (Ch 2)
a. The variable cost per unit
b. The fixed cost
c. Explain the method used by the company to estimate the cost function. Suggest other methods than may be used to estimate cost function.
Answer:
Q3. Differentiate between routine and non-routine operating decisions made by managers. Explain two types of non-routine decisions with numerical examples. (Ch 4 )
Answer
Q4. Huda Corporation's accounting information system showed the following balances at the end
of this period:
Work in process $40,000
Finished goods 60,000
Cost of goods sold 100,000
Miss-applied overhead this period totaled $60,000; Huda maintains a single overhead account in its general ledger. If the miss-applied overhead is considered material, prepare the journal entry to record its disposition.
Discuss why you could have Misallocated Overhead? (Ch 5)
Answer:
Q5 What do you understand by Activity Based Costing? Explain the process used to assign costs in an ABC system (Ch 7 )
Answer:
Accounting Principles
ISBN: 978-1118875056
12th edition
Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso