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.

	Activity
1	Sales not on account	$29,440
2	Sales on account	28,060
3	Selling Expense	3,220
4	Administrative Expense	6,210
5	Supplies Factory	3,450
6	Insurance Factory	920
7	Indirect Labor	6,900
8	Factory Salaries	288
9	Factory Property Tax	173
10	Maintenance Expense Factory	2,001
11	Depreciation Expense Factory	3,726
12	Utilities Factory	828
13	Purchases of Raw Materials	17,250
14	Direct Labor Factory	3,450
15	Raw Material Inventory, January 1	2,070
16	Raw Material Inventory, December 31	1,380
17	Work in Process Inventory, January 1	4,140
18	Work in Process Inventory, December 31	2,300
19	Finished Goods Inventory, January 1	5,980
20	Finished Goods Inventory, December 31	4,830
21	Bad Debt Expense	276
22	Accounts Receivable, net	9,430
23	Prepaid Expenses	840
24	Land	2,760
25	Plant and Equipment	37,950
26	Cash 1/1/05	4,646
27	Accounts Payable	14,410
28	Interest Expense	28
29	Notes Payable, 10%	2,070
30	Bonds Payable 8%	8,510
31	Stockholders' Equity	31,510
32	Retained Earnings	6,670
33	Income tax rate	30%

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:

Part 2

• Full costing or absorption costing
• Variable costing
• Target costing
• Life cycle costing
• Activity-based costing