Q1. “Strategic management and decision-making are fundamental elements in the effective operation of an organization.”
Q1. “Strategic management and decision-making are fundamental elements in the effective operation of an organization.” Discuss this statement considering the process of strategic management and decision-making. Provide an example of one Saudi Company to support your answer. (3 Marks)
Note: Your answer must include a suitable example showing the process of strategic management and decision-making.
Q2. The following details were extracted from the records of KCL Company for the year 2020:
(4 Marks)
|
Month |
Units Produced |
Total Cost (SAR) |
|
March |
40,000 |
405,000 |
|
April |
42,000 |
408,000 |
|
May |
45,000 |
410,000 |
|
June |
47,000 |
414,000 |
|
July |
51,000 |
503,000 |
|
August |
54,000 |
524,000 |
|
September |
32,000 |
370,000 |
|
October |
38,000 |
375,000 |
Required:
a)Using the high-low analysis method, find out variable and fixed costs and determine a cost function.
b)Take the data for July and August and using the two-point method, find out variable and fixed costs and determine a cost function.
Q3. A&T Company makes a product that sells for SAR 300 per unit. The other details related to this product are as follows: (4 Marks)
Variable costs = SAR 60 per unit
Fixed costs = SAR 144,000
You are required to calculate:
a)Contribution margin per unit and contribution margin ratio.
b)Break-even point in units and sales SAR.
c)Pretax profit if the company sells 1200 units.
d)Units needed to reach target pretax profit of SAR 120,000.
e)Sales SAR needed to reach the target pretax profit of SAR 120,000.
f)The margin of safety in units for budgeted next year’s sales at 1,800 units.
g)The margin of safety in SAR for budgeted next year’s sales at 1,800 units.
Q4. a) How is job costing used in the service sector and manufacturing sector? (1 Marks)
b) Referring to the concept of job costing in the manufacturing sector, what are the journal entries a manufacturing company must record to show the flow of costs? Explain and analyze your answer by providing examples of one Saudi company that uses job costing. (3 Marks)
Note: Your answer must include a suitable example showing all the necessary journal entries.
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