Assignment: Cost Behavior Patterns and Concepts
Length: 750 to 1,000 Words.
As EEC's corporate business financial analyst, you will need to have a clear understanding of the different types of costs (variable, fixed, and mixed) that the company carries. Complete the following for this assignment:
1) Review EEC's journal activity.
2) Define and identify its variable, fixed, and mixed costs.
3) Determine what affect a sales volume increase or decrease will have on unit fixed cost, unit variable cost, total fixed cost, and total variable cost.
View EEC's journal activity.
Part 2
As an EEC corporate business financial analyst, you must have an expert understanding of the various costing methods. Select 1 of the following costing concepts:
a. Full costing or absorption costing
b. Variable costing
c. Target costing
d. Life cycle costing
e. Activity-based costing
Respond to the following questions on the costing concept that you selected:
i. Provide the definition of the concept.
ii. Discuss how and when the concept could be used by EEC.
iii. Discuss the advantages and disadvantages of the concept as it relates to EEC.
Eddison Electronic Company
Journal Entries 2005 "000" Omitted
Activity
o Sales not on account $29,440
o Sales on account 28,060
o Selling Expense 3,220
o Administrative Expense 6,210
o Supplies Factory 3,450
o Insurance Factory 920
o Indirect Labor 6,900
o Factory Salaries 288
o Factory Property Tax 173
o Maintenance Expense Factory 2,001
o Depreciation Expense Factory 3,726
o Utilities Factory 828
o Purchases of Raw Materials 17,250
o Direct Labor Factory 3,450
o Raw Material Inventory, January 1 2,070
o Raw Material Inventory, December 31 1,380
o Work in Process Inventory, January 1 4,140
o Work in Process Inventory, December 31 2,300
o Finished Goods Inventory, January 1 5,980
o Finished Goods Inventory, December 31 4,830
o Bad Debt Expense 276
o Accounts Receivable, net 9,430
o Prepaid Expenses 840
o Land 2,760
o Plant and Equipment 37,950
o Cash 1/1/05 4,646
o Accounts Payable 14,410
o Interest Expense 28
o Notes Payable, 10% 2,070
o Bonds Payable 8% 8,510
o Stockholders' Equity 31,510
o Retained Earnings 6,670
o Income tax rate 30%.
Format your assignment according to the following formatting requirements:
(1) The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
(2) The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
(3) Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.