Assignment Type:Individual ProjectDeliverable Length:1 Excel file
Points Possible:125Due Date:5/19/2013 11:59:59 PM CT
APA formatted References Due: 05/08 3:00 a.m.
The company’s CEO just returned from a seminar on management accounting and some new tools that can be used to assist in management of the business. One of the new tools she learned about is referred to ascontribution format income statements.
It is time for the accounting department to prepare the month-end income statement. In the past, the standard format income statement, as shown below, has been used. But for the first time, the CEO has asked that the contribution format be used instead.
While most of the different expense categories are easy to analyze, the utility expense seems to display characteristics of both variable costs and fixed costs. To help prepare this income statement format, the accounting department collected data from the past 12 months. This data included actual utility costs as compared to each month’s business volume. Some of it is shown below.
History of Utility Expenses
Utility Costs
Comment
January
$10,000
closed the entire month for repairs
February
$11,000
produced 5,000 widgets
March
$10,600
produced 3,000 widgets
April
$11,600
produced 8,000 widgets
Submit 1 Excel file including the following information:
Even when the plant was shut down for a month, what was the utility expense that month?
In February, what was the amount of utilities that was fixed, and what portion was variable?
Based on the rest of the data, what is the variable portion of utility costs per unit in February?
If June’s expected units produced are 9,000, what would the expected utility costs be? Show your calculations.Prepare a contribution format income statement:
use this month’s standard formatted income statement below
use the History of Utility Expenses provided
show as many calculations as possible
Standard Format Income Statement
Comment
Sales
100,000
(COGS)
-70,000
30% of these costs are fixed
Gross Profit
30,000
(S,G,A)
-20,000
80% of these costs are fixed
Net Income
10,000
Please submit your assignment.
The following grading criteria will be used:
Grading Guidelines
15%
Even when the plant was shut down for a month, what was the utility expense that month?
15%
In February, what was the amount of utilities that was fixed, and what portion was variable?
15%
Based on the rest of the data, what is the variable portion of utility costs per unit in February?
15%
If June’s expected units produced are 9,000, what would the expected utility costs be? Show your calculations.
40%
Prepare a contribution format income statement:
use this month’s standard formatted income statement below
use the History of Utility Expenses provided
show as many calculations as possible
Also read:
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