• ABC Company estimates that it will require 100,000 machine-hour to meet the coming period’s estimated production level in 2018. In addition, the company estimates total fixed manufacturing overhead at SR 300,000, and variable manufacturing overhead costs of SR 3 per machine -hour. (2marks)
  • If your fixed monthly utility charge is SR 100, your variable cost is SR1 per kilowatt hour, and your monthly activity level is 3,000 kilowatt hours, what is the amount of your utility bill? (1.0 marks)
  • Assume the following hours of maintenance work and the total maintenance costs for the following months: (1. marks)
  • following information are extracted from the records of ABC company for 2018: (1marks)

ABC company produced in Feb.2018 two job orders with the following information (Amounts in SR):

Job no. 1

Job no.2

Direct material

300,000

400,000

Direct labor

150,000

200,000

Actual machine hour used by orders

5,000

8,000

Units produced

5,000

6,000

Required:

  • Calculate pre-determined overhead allocation rate.
  • Calculate the applied overhead to job orders.
  • Calculate the total cost for each job order and cost per unit.

Month

Maintenance hours

Total cost

July

2,000

20,0000

Aug.

3,000

25,000

Sept.

6,000

40,000

Oct.

4,000

30,000

Nov.

5,000

35,000

Dec..

7,000

45,000

Required:Calculate fived costs using The High-Low Method

Revenues

300,000

Variable manufacturing expenses

100,000

Fixed manufacturing expenses

20,000

Variable selling expenses

15,000

Variable administrative expenses

20,000

Fixed selling expenses

25,000

Fixed administrative expenses

30,000

Required: prepare income statement using contribution margin approach.

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