View attached explanation and answer. Let me know if you have any questions.

College of Administrative and Financial Sciences

Assignment 3
Deadline: 19.07.2021@ 23:59

Course Name: Cost accounting

Student’s Name:

Course Code: ACCT 301

Student’s ID Number:

Semester: summer term

CRN:
Academic Year:1442 H

For Instructor’s Use only
Instructor’s Name:
Students’ Grade: Marks Obtained/Out of

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 answered 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.

Page 1 of 3

1. Provide numerical examples of a Direct Material Budget for the second quarter (April to June)
by considering a manufacturing company operating in Saudi Arabia as a sample study.
(2marks)
Saudi Delta Company
Direct Materials Budget
Second Quarter for the months of April through June
April
May
Production Unit Required (a)
2,500
5,300
Direct Materials Required for unit production, in pounds (b)
10
10
Total Direct Material Requires, in pounds (c=a x b)
25,000
53,000
Less: Direct Material Beginning Inventory (d)
3,540
3,200
Plus: Desired Direct Material ending inventory (e)
2,400
4,300
Direct Material to purchase, in pounds (f=c-d+e)
23,860
54,100
Cost per unit pounds (g), in SAR
5.00
5.00
Budgeted Direct Material Cost (h= f x g), in SAR
119,300 270,500

June
6,700
10
67,000
3,500
3,800
67,300
5.00
336,500

Total
14,500
10
145,000
3,540
3,800
145260
5.00
726,300

2. XYZ Industries Co. decided to allocate Human Resource department costs based on the number
of employees in each department and Information Technology costs based on the number of
machine hours in each department. (2marks)
Required:
a)
Give a numerical example for the four departments, given the table below, (the
numerical information should be appropriate as per the table given as a reference.
Support Departments
Human

Operating Departments

Information Hot

Resource Technology

TOTAL

Rolled cold Rolled Hollow

Hollow Steel

Steel

Total department cost

80,000

140,000

500,000

600,000

1,320,000

Number of employees

8

6

24

22

60

15

25

60

60

160

Number of machine hours

b- Then based on your given information, use The Direct method to allocate support department
costs.
Allocate cost:
Human Resource

(80,000)

Information Technology

TOTAL

0

41,739

38,261

0

(140,000)

70,000

70,000

0

0

611,739

708,261

1320000

Page 2 of 3

1. For what types of products is the physical output method appropriate? Give suitable and real
example that should support your answer. ch9 (1mark)
When the process produces a joint product, and the joint product can be measured in the
same units, then the Physical Output Method is used to allocate the joint cost.
Real-Life Example: Aramco company process crude oil to produce gasoline, diesel, and jet
fuels. If the total cost of raw crude oil is $120,000 and the total cost of the extraction process is
$80,000. Then the total joint cost to be allocated is $120,000 + $80,000= $ 200,000.
If gasoline production is 30000 barrels, diesel production is 50000 barrels, and jet fuel
production is 20000 barrels, then, using the physical output method, the allocation of joint cost is
shown in the table below.

Product

Split-Off Quantity
(barrels)

Percent at
Split-Off

Gasoline
Diesel
Jet Fuel
Total

30000
50000
20000
100000

30%
50%
20%

×

Joint
Cost

× 200000
× 200000
× 200000

=

=
=
=
Total

Page 3 of 3

Joint Cost
Allocation

$60,000
$100,000
$40,000
$200,000

Please view explanation and answer below.Updated

College of Administrative and Financial Sciences

Assignment 3
Deadline: 19.07.2021@ 23:59

Course Name: Cost accounting

Student’s Name:

Course Code: ACCT 301

Student’s ID Number:

Semester: summer term

CRN:
Academic Year:1442 H

For Instructor’s Use only
Instructor’s Name:
Students’ Grade: Marks Obtained/Out of

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 advise...