ACC 301 (III)
Q 1 What do you understand by ABC? Explain the process used to assign costs in an ABC system.
Q 2 Week 9: Chapter 4, Relevant information for decision making
Relevant qualitative factors include any nonquantitative issues that managers should consider before taking a decision. Give examples of questions managers could ask to help them identify relevant qualitative factors?
Q 3 Week 9: Chapter 4, Relevant information for decision making
Jubran Co. manufactures product A which is a part of its main product. Jubran Co makes 50,000 units of product A per year. The production costs are detailed below. An outside supplier has offered to supply 50,000 units of product A per year at $ 2.45 each. Fixed production cost of $ 40,000 associated with the product A are unavoidable. Should Jubran Co make or buy the product A?
The production cost per unit for manufacturing a unit of product A are:
| Direct Materials | 0.85 |
| Direct Labor | 0.65 |
| Variable Manufacturing Overhead | 0.40 |
Q 4 Week 10: Chapter 8, Measuring and Assigning Support Department Costs
SARCO has two separate producing departments called Grinding and Assembly. It has two support departments, Power and Maintenance. SARCO has decided to allocate Power department costs based on the Kilowatt-hours and Maintenance costs based on the Maintenance hours. Given the information below, use the direct method to allocate support department costs.
| Support Department | Producing Department | |||
| Power | Maintenance | Grinding | Assembly | |
| Direct Costs | $250,000 | $160,000 | $100,000 | $60,000 |
| Kilowatt-hours | -- | -- | 0.75 | 0.25 |
| Maintenance hours | -- | -- | 0.05 | 0.05 |
