Saudi Electronic University Support Department Costs Questions

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Q 1 Provide numerical example of assigning support department cost and discuss the purpose of assigning support department costs (Week 10: Chapter 8, Measuring and Assigning Support Department Costs).

Q 2 LMN Compagny produces three products K, L and M.During the year, the joint costs

of processing the three products were $480,000.

Production and sales value information were as follows:

Sales Value

Product Units at Split-Off Separable Costs Selling Price

K 500,000 $13 per unit $6.00 per unit $40 per unit

L 300,000 $12per unit $4.00 per unit $37 per unit

M 200,000 $8 per unit $3.00 per unit $28 per unit

Allocate the joint costs using the physical output method.

(Week 11: Chapter 9, Joint product and by – Product costing)

Q 3Provide numerical examples of static and flexible budget and discuss how these budgets could be used to evaluate the performance of the managers (Week 12: Static and flexible budgets).

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