Managerial Accounting: ACT 500

Critical thinking 2

Managerial Accounting : ACT 500

Critical thinking 2

Course Name: Managerial Accounting 
Course Code: ACT 500 
  
 

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.

Assignment Question(s):                                                                            [100 marks]

Q1. Discus how static budget failed to analyze cost and revenues variances and how flexible budget has overcame static budgets’ deficiencies and explain how does the flexible budget actually work?

                                                                                                                                             [15 marks]

Note: do not copy and paste from other sources, you can use other sources but formulate your own answers.

Q2. Hamed Company is preparing budgets for the quarter ending June 30, 2019.

Budgeted sales in units for the next five months are:

April   May       June      July
20,00050,00030,00025,000

Required:

  1. Prepare Sales budget for April, May & June assuming selling price per unit is SR 15.

                                                                                                                                   [10 marks]

  1. Prepare production budget for April, May & June if the company wishes ending inventory as

10 % of next month sales units.                                                                                       [10 marks]                                               

Q3.Oraby Industries is a division of a major corporation. Last year the division had total sales of SAR 23,380,000, operating income of SAR 2,828,980, and invested assets of SAR 10,000,000.

Required:

  1. What is the division’s profit margin?            [5 marks]
  2. What is the division’s investment turnover?     [5 marks]
  3. What is the division’s return on investment (ROI) using DuPont formula?     [5 marks]
  4. What is the residual income if investors require a minimum return of 20%?            [5 marks]

Q4. Taha Company produces joint three products: Product A, Product B, and Product C. 

           During the year, joint costs of processing the three products were SAR400, 000.  The following information were given to you as follows:

ProductUnits ProducedSelling price per unit  at split-off point(SR)Expenses per  unit after split-off point ( (SR)Selling price per unit  after split-off point(SR)
A400,000202040
B400,000181528
C800,000121417

Required:

  1. Allocate the joint costs using the physical output method.                [15 marks]
  2. Allocate the joint costs using the net realizable value method.             [15 marks]
  3. Allocate the joint costs using sales value at split-off point method.            [15 marks]