Cost accounting

Cost accounting

Question: 1- (3 points)
If you have these 2 constraints:
0.6R+4D ? 180,000 Machine Hour constraint
3R+5D ? 150,000 Direct Labor Hour constraint
Required:
a Draw a graph showing the possible production plans for this company.
b- From your opinion where is the feasible area of the production plan. Explain your answer.
Answer:

Question no 2
A housekeeping support department budgets its costs at SR 40,000 per month plus SR 12 / hour. For January the following were the estimated and actual hours provided by
the housekeeping support department to 3 operating department.
Estimated hours spent cleaning Actual hours spent cleaning
Department A 1600 1500
Department B 1400 1600
Department C 2000 1800
Total 5000 4900
Required:
A- What is the support department’s allocation rate if estimated activity is the allocation base?
B What is the support department’s allocation rate if actual activity is the allocation base?
C List one advantages and one disadvantage for each types of allocation rate. (3 points)

3- Al Yamamah Steel Industries Co. uses the step method for allocating the costs of its service departments to operating departments. The company has two support
departments (Human Resource and Information Technology) and two operating departments (Hot Rolled Hollow Steel and Cold Rolled Hollow Steel).
Al Yamamah Steel 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. (4 Points).
Required:
a- Give a numerical example for the four departments as a given information.
Support Departments Operating Departments TOTAL
Human Resource Information Technology Hot Rolled Hollow Steel cold Rolled Hollow Steel
Total department cost
Number of employees
Number of machine hours
b- Then based on your given information, use the step-down method to allocate support department costs.
Allocate cost:
Human Resource
Information Technology