Part 1

In a memo to your new assistant, Susan Thompson, complete the

following:

·        Explain to her the similarities and differences between financial and managerial accounting.

·        Provide examples of managerial accounting reports that she could expect to see within EEC, and explain how management might use the information to make decisions.

·        Keep in mind that although the income statement, the statement of owners’ equity balance sheet, and the cash flow statement are generated in financial accounting, they are used to develop all of your managerial accounting reports.

·        Examples of a few of those reports are the horizontal analyzes, vertical analyzes, and ratios.

Part 2

In a memo to the board of directors, discuss the information found in each of the following financial statements, and describe how accounting information is used by managers for planning and control:

·        Balance sheet

·        Income statement

·        Statement of cash flows

·        Statement of stockholders’ equity

Part 3

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 4

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 costing

·        Variable costing

·        Target costing

·        Life cycle costing

·        Activity-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.

Journal Attached

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Journal Entries 2005
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“L53
El
D Sales not on account
Sales on account
SellinI Emense
Administrative EXIEF’ISE
SuI Ilies Facto
nsurance Facto direct Labor acto Salaries acto ProIert Tax
Maintenance Expense N
no
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m
I: 1 El
Depreciation Expense
Facto Utilities Facto Purchases of Raw
Materials Direct Labor Facto Raw Material Inventory,
“IE Janua “I Raw Material Inventory,
December 31 1I.I’I."orlr in Process Inventory,
“IT Janua “I 4,140 1I.I’I."orlt in Process Inventory,
December 31 Finished Goods Inventory,
13 Janua “I 5,38fl Finished Goods Inventory,
December 31 Bad Debt EXIET’ISE
Accounts Receivable, net
PreIid EXIEHEES 11
12 13
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5,
GI 16 1,38EI ’18 2,3EIEI El
1 Ill-,BSEI 3’. Plant and E ui Iment
lCash “III’II’UE
Accounts Pa able
Interest EXIEHSE
Notes Pa able, 10%
EIonds Pa able 8%
Stockholders’ E uit
F-tetained EarninIs
Income tax rate -l’—‘L N "L51 “N “LII-l u: “LII-1 “o1 “LII-1 “o1 “LII-l
gasses s so cg osssssm
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