Decision-Making

Q1. What information is relevant for decision-making? Differentiate between relevant and irrelevant information for decision-making. Support your answer by explaining the information in the context of an organization.

Q2. The following transactions are related to a particular job. You are required to make the necessary journal entries. (4 Marks)

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a) The materials storeroom receives a shipment of direct and indirect materials that cost SAR 50,000.

b) Materials are sent to the stamping and assembly areas. The cost of the direct materials is SAR 5,600 and the cost of the indirect materials is SAR 3,200.

c) Wages totaling SAR 7,000 are accrued; 60% of these costs are direct labor and 40% are indirect labor.

d) Overhead costs are allocated to work in process using an allocation rate of 250% of direct labor costs.

e) Job no. 25, with a total cost of SAR 8,500 is completed.

f) Job no. 25 is shipped to the customer, who is billed for SAR 15,000.

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