## Discuss the concept of Equivalent Units in process costing and give numerical example?

Q1 Provide example of one Saudi Company and analyze two examples of organizational strategies and operating plans for this example. (1 Mark)

Q2 AbdulkrimCompany manufactures a product A.  The company estimates the cost function for the total costs. The cost driver is number of units.  The following  informations were collected:

Month                     Units                                              Total Costs

January                     3,560                                             \$242,400

February                   3,800                                             \$252,000

March                       4,000                                             \$260,000

April                         3,600                                             \$244,000

May                          3,200                                             \$228,000

June                          3,040                                             \$221,600

Compute a cost function using the high-low method.

(1 Mark)

Q3        Hashim Corporation sells its product for \$17 per unit.  Its variable cost is \$10 per unit, and total fixed costs are \$800.  Assuming next period’s estimated sales are 300, calculate the following amounts:

a.   Degree of operating leverage

b.   Margin of safety in units

c.   Margin of safety in revenues

(1 Mark)

Q 4Provide one numerical example for allocation of overhead of one job and analyze this example?

(1 Mark)

Q 5 Discuss the concept of Equivalent Units in process costing and give numerical example? (1 Mark)

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