750 – 1,000 words (not including title page and references) Part 1 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: Review EEC’s journal activity.Define and identify its variable, fixed, and mixed costs.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. 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: Full costing or absorption costingVariable costingTarget costingLife cycle costingActivity-based costing Respond to the following questions on the costing concept that you selected: Provide the definition of the concept.Discuss how and when the concept could be used by EEC.Discuss the advantages and disadvantages of the concept as it relates to EEC.
eec_s_journal_activity..xls

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Eddison Electronic Company
Journal Entries 2005
“000” Omitted
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
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Activity
Sales not on account
Sales on account
Selling Expense
Administrative Expense
Supplies Factory
Insurance Factory
Indirect Labor
Factory Salaries
Factory Property Tax
Maintenance Expense
Factory
Depreciation Expense
Factory
Utilities Factory
Purchases of Raw Materials
Direct Labor Factory
Raw Material Inventory,
January 1
Raw Material Inventory,
December 31
Work in Process Inventory,
January 1
Work in Process Inventory,
December 31
Finished Goods Inventory,
January 1
Finished Goods Inventory,
December 31
Bad Debt Expense
Accounts Receivable, net
Prepaid Expenses
Land
Plant and Equipment
Cash 1/1/05
Accounts Payable
Interest Expense
Notes Payable, 10%
Bonds Payable 8%
Stockholders’ Equity
Retained Earnings
Income tax rate
$29,440
28,060
3,220
6,210
3,450
920
6,900
288
173
2,001
3,726
828
17,250
3,450
2,070
1,380
4,140
2,300
5,980
4,830
276
9,430
840
2,760
37,950
4,646
14,410
28
2,070
8,510
31,510
6,670
30%
Eddison Electronics Company
1.5GB Chip Project – USA
Actual
2005
Plan
Investment in Equipment
Difference
$5,000,000
$5,000,000
$0
$5,250,000
2,500,000
$2,750,000
$6,000,000
2,800,000
$3,200,000
$750,000
$300,000
$450,000
900,000
500,000
$1,350,000
950,000
500,000
$1,750,000
$50,000
$0
$400,000
$5,250,000
2,500,000
2,750,000
900,000
$1,850,000
$6,000,000
2,800,000
3,200,000
950,000
$2,250,000
$750,000
300,000
450,000
$50,000
$400,000
Income
Sales
Variable Expenses
Contribution Margin
Less Fixed Expenses:
Costs
Depreciation
Net Operating Income
Cash Flow
Sales
Less Variable Expenses
Contribution Margin
Less Costs
Net Annual Cash Inflow

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