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ACCT 322 Saudi Electronic University Managerial Accounting Questions

ACCT 322 Saudi Electronic University Managerial Accounting Questions

Question Description

Assignment Question(s):

Q1.What are the Characteristics of Flexible Budgets? Give an example of Saudi Company that prepare them

Q2. Karim Corporation is considering two alternatives that are code-named A and B. Costs associated with the alternatives are listed below:

Alternative A

Alternative B

Supplies costs

SAR 33 000

SAR 33 000

Assembly costs

SAR 48 000

SAR 51 000

Power costs

SAR 32 000

SAR 22 000

Inspection costs

SAR 11 000

SAR 27 000


a. Which costs are relevant and which are not relevant in the choice between these two alternatives?
b. What is the differential cost between the two alternatives?

Q3. Mushrif Company has projected sales and production in units for the second quarter of 2017 as follows













Cash production costs are budgeted at SAR7 per unit produced. Of these production costs, 30% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses (all paid in cash) amount to SAR 70,000 per month. The accounts payable balance on March 31 totals SAR 100,000, all of which will be paid in April.

Assume that all units will be sold on account for SAR20 each. Cash collections from sales are budgeted at 70% in the month of sale, 20% in the month following the month of sale and the remaining 10% in the second month following the month of sale. Accounts receivable on March 31 totaled SAR 300,000.


A. Prepare a schedule for each month showing budgeted cash disbursements for Mushrif Company.

B. Prepare a schedule for each month showing budgeted cash receipts for Mushrif Company.

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