Assignment 2 (Weight 5%)
| Prof. Zahirul Hoque Course instructor(s):
Course Title: Foundations in Managerial Accounting Course Code: ACC 222 Available from: 3 October 2022 via LMS Submission Deadline: 24 October 2022 before 23:59 via LMS. Number of pages: 3 (including cover page) Total marks: 5
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Term: 221 2022/2023
| Assignment Rules
§ The student must submit this assignment independently. § The student must include his/her Name and ID in the space below with the section number. § There are TWO QUESTIONS in this assignment, and it has sub-questions. Please answer them ALL. § Show computations in detail, where appropriate. § The assignment MUST be submitted using this document in MS Word via LMS with the file name using the Student ID number. For example, ACC222_Assignment2_ (ID #). § For late submission penalty and academic integrity policy: refer to the course syllabus document. The PSU Honor Code أتعهد أنا الطالب الموقع أدناه بأن أكون ملتزماً بالأمانة ومطبقاً لجميع تعليمات وأنظمة الامتحانات في الجامعة “I do hereby pledge to conduct myself with honesty and integrity during the examination and abide by the rules and regulations of the University.” Don’t forget to write and sign the Honor Code pledge! Name and ID: Signature………………………………………Date…………………………… _ Student’s section: ———————————————————————————————————————– Student’s Name: ———————————————————– Student’s ID: ——————————————– |
| Question No. | Score |
| 1 | /3 |
| 2 | /2 |
| Total | /5 |
| Total | |
Grade achieved
Assignment 2 Individual
Cost Concepts and Cost Behavior
Question 1 Cost behavior analysis
Al-Faisal Company wants to develop an estimate of its materials Storeroom costs. Alex Molly, the controller, has collected what he believes to be the relevant data for the past 12 months. It is Mr. Molly’s professional opinion that the storeroom costs should be closely related to the volume of the shipments received; thus, he has provided you with the following information:
Month Number of Shipments Storeroom Costs
January………………….. 300 $6,000
February………………… 425 8,600
March……………………. 375 5,300
April……………………… 275 4,800
May………………………. 250 4,500
June………………………. 325 5,200
July……………………….. 300 4,250
August…………………… 650 9,400
September…………….. 375 5,100
October…………………. 290 3,500
November……………… 450 6,850
December……………… 280 3,750
Required task:
Prepare a cost function (formula) for the storeroom costs using the High-Low cost-behavior method (Show calculations) (3 marks)
[Marks distribution: calculation of fixed costs and variable costs 2 marks and the cost formula 1 marks].
Question 2 Cost Concepts
Al-Safi Furniture Company manufactures outdoor furniture and incurred the following costs during the month of August 2022:
| Timber | $ 25 000 |
| Paint | $ 5 000 |
| Glue | $ 500 |
| Wages—assembly personnel | $ 20 000 |
| Wages—factory supervisor | $ 3 500 |
| Factory cleaner’s wages | $ 2 000 |
| Sales commissions | $ 10 000 |
| Administrative staff salaries | $ 4 000 |
| Depreciation—factory equipment | $ 3 000 |
| Depreciation—sales office equipment | $ 1 000 |
| Utilities, insurance—factory | $ 6 000 |
| Utilities, insurance—sales office | $ 2 000 |
| Advertising | $ 8 000 |
| Total costs | $ 90 000 |
Required:
Compute the total product cost classifying under Direct Materials, Direct Labor, and Factory Overhead (2 marks = 1 mark for correct classification of cost and 1 mark for the correct total product cost)
Write your answer below:
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