College of Administrative and Financial Sciences Assignment 2022

College of Administrative and Financial Sciences
Assignment 1
Deadline: 29/02/2020 @ 23:59
Course Name: Cost accounting Student’s Name:
Course Code: ACCT 301 Student’s ID Number:
Semester: 2 CRN:
Academic Year: 1440/1441 H
For Instructor’s Use only
Instructor’s Name:
Students’ Grade: Marks Obtained/Out of 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.
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 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 answered 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.
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Q1. Analyze some examples of relevant and irrelevant Cash Flows for one Saudi Company?
Answer:
Irrelevant cost (negative or positive) is considered as cost that will not be influenced by the
decision of management. The fixed cost as well as sunk cost is considered as irrelevant cost. These
costs are ignored at the time of taking decision (Bragg, 2016). On the other hand, the relevant cost is
considered as managerial accounting expression that defines avoidable cost that is occurred only at
the time of taking particular decision of business. The relevant cost concept is utilized unnecessary
data that could obscure the procedure of making decision. In this way, the relevant cost is a cost
influenced by the decision of management. From the annual report of Saudi Aramco, it is found that
the examples of irrelevant cost are depreciation and amortization cost. The examples of relevant
cost are interest and other financial cost (Moshashai, Leber & Savage, 2018).
Q 2 a - Discuss why managers estimate a cost function and use Cost volume Profit analysis?
Give numerical example of cost function and Cost Volume Profit Analysis and analyze how it
will be used by managers?
Answer:
The managers utilize cost volume profit analysis and cost function for various reasons
(Datar & Rajan, 2018). The CVP analysis is helpful for management because it gives insight in the
effect and inter-connection of the factors that affect profits of the company (Ouda, et. al, 2017). The
relation between volume, profit as well as cost makes up a profit structure of the company. It can be
understand from below example –
Example: ABC wants to have annual profit of $ 100000 from the sale of applications.
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