DescriptionCollege of Administration and Finance Sciences
Assignment (2)
Deadline: Saturday 18/2/2023 @ 23:59
Course Name: Managerial Accounting
Student’s Name:
Course Code: ACCT 322
Student’s ID Number:
Semester: 2nd
CRN:
Academic Year: 1444 H
For Instructor’s Use only
Instructor’s Name:
Students’ Grade:
/15
Level of Marks: High/Middle/Low
Instructions – PLEASE READ THEM CAREFULLY
• The Assignment must be submitted on Blackboard (WORD format only) via allocated
folder.
• Assignments submitted through email will not be accepted.
• Students are advised to make their work clear and well presented, marks may be
reduced for poor presentation. This includes filling your information on the cover
page.
• Students must mention question number clearly in their answer.
• Late submission will NOT be accepted.
• Avoid plagiarism, the work should be in your own words, copying from students or
other resources without proper referencing will result in ZERO marks. No exceptions.
• All answers must be typed using Times New Roman (size 12, double-spaced) font.
No pictures containing text will be accepted and will be considered plagiarism.
• Submissions without this cover page will NOT be accepted.
1
College of Administration and Finance Sciences
Assignment Question(s):
(Marks 15)
Q1. Differentiate between Variable and Absorption costing with a suitable numerical example and
explain what would be the changes in Net Operating Income under both the costing methods.
Answer
Q2. ABC prepares budgets for the quarter ending June 30. Sales in units: April 20,000, May 50,000,
June 30,000, July 25,000. Selling price is SR 10 per unit. , inventory in March 31, is 4,000 units.
Desired inventory is 20% of the next month sales.
Required: Prepare sales and production budgets.
ANSWER:
Q3. The Net Present Value Method uses the concept of Time Value of Money when evaluating
Capital Budgeting Decisions.
Required: Explain criteria to accept or reject investment projects based on net present value method.
ANSWER:
Q4. ABC Company has a car and it considers whether to sell it directly at a price of SR 100,000 or to
make some modifications costing SR 10,000 to sell it at a price of SR 120,000.
Required: using the differential analysis which alternative do you recommend about the car.
Answer:
Alternative 1
Alternative 2
Sell without
Sell after
modifications
modifications
Revenues
Modification costs
2
Differential
College of Administration and Finance Sciences
Differential income
Q5. Use the following information about the calendar-year cash flows of MacArthur Company to
prepare a statement of cash flows (direct method) and a schedule of noncash investing and financing
activities.
Cash and cash equivalents, beginning-year balance
Cash and cash equivalents, year-end balance
Cash payments for merchandise inventory
Cash paid for store equipment
Cash borrowed on three-month note payable
Cash dividends paid
Cash paid for salaries
Cash payments for other operating expenses
Cash received from customers
Cash interest received
Answer:
3
$ 18,000
78,750
75,750
15,750
22,500
12,000
39,000
48,000
220,500
8,250
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