Assignment: Cost Accounting
1- You will allocate the support department costs to operating departments using Direct Method. You have also to explain the details of calculations to Mr Ibrahim who is a student having training in Frank company (you will explain the formulas used in the calculations to Mr Ibrahim).
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Support Departments
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Operating Departments
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Administration
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Housekeeping
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Medical
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Dental
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Total
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Cost
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32,400
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50,000
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130,000
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180,000
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310,000
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Allocation Bases:
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Support Departments
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Operating Departments
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Administration
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Housekeeping
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Medical
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Dental
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Total
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No. of Employees
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2
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2
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6
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2
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12
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Square Feet
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900
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100
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6,000
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4,000
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11,000
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Administration Cost will be allocated using number of employees and Housekeeping cost will be allocated using square feet.
2- Explain to Mr Ibrahim the objectives of allocation of support department costs.
3- Discuss with Mr Ibrahim why you are using the direct method. What are the other possible methods? What is the difference between these methods and when we will have to use each method?
Q 2 You are working in ABC Manufacturing company. You have new colleague working with you. Your colleague requested from you to explain to him the differences between the routine and non-routine operating decisions? Explain to your colleague and give him some examples of routine and non routine decisions?
Explain for your colleague the process for making nonroutine operating decisions?
Q 3 Ryan Company is having some non routine decisions to be made during the current period. Describe quantitative analysis and qualitative analysis used in non routine decisions, and explain why both are important in management decision making.