CLA 2 Comprehensive Learning Assessment 2 For this assignment, develop a 4- to 6-page response containing written narrative, figures, and charts. View the Written Paper Grading Rubric [Tech Team Link...

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CLA 2 Comprehensive Learning Assessment 2 For this assignment, develop a 4- to 6-page response containing written narrative, figures, and charts. View the Written Paper Grading Rubric [Tech Team Link Turnitin Rubric: COB - Written Paper Rubric] Provide general discussion on predetermined variable overhead criterion and its possible dependence on the activity for which it is used. Provide a variable costing income statement in which variable overhead is divided among different activities, and that each activity has its own predetermined variable overhead criterion. The following is a partially completed lower section of a departmental expense allocation for Cozy Bookstore. It reports the total amounts of direct and indirect expenses allocated to its five (5) departments. Allocate the expenses of the two service departments (advertising and purchasing) to the three operating departments and provide the complete income statement. Advertising and purchasing department expenses are allocated to operating departments on the basis of dollar sales and purchase orders, respectively. Information about the allocation bases for the three operating departments follows. Phoenix Company’s 2019 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units. · Classify all items listed in the fixed budget as variable or fixed. · Also determine their amounts per unit or their amounts for the year, as appropriate. · Identify the unit variable costs in the format of variable costing, according to your findings in part a · Organize a template for variable costing income statements in which the sales volume is a variable. · Test your template for 15,000 units sales volume to see if you get the same income as stated above · Find the breakeven point and provide the income statement at break even · Provide income statement at sales volume 12,000, 14,000, 16,000, and 18,000 APA Format, This Essay must include the Article Title, Introduction and Conclusion .Refrencce page and in text citing in-text. Additional information about APA format APA Reference: APA Citation-machine website: https://www.citationmachine.net/apa/cite-a-website APA Citing in-text https://research.moreheadstate.edu/c.php?g=107001&p=695202
Answered 2 days AfterApr 16, 2022

Answer To: CLA 2 Comprehensive Learning Assessment 2 For this assignment, develop a 4- to 6-page response...

Khushboo answered on Apr 18 2022
92 Votes
Introduction
Accounting plays a vital role in every entity. Managerial accounting is significant for the management in achieving the goals of the entity and it is a tool for the management for identifying and communicating the financial information (Sherman, Fraser 2022). In this, we are discussi
ng the predetermined variable overhead costs and variable costing for the different activities. It also discussed the preparation of the departmental income statement and allocation of the costs for the advertising and purchasing department. Further based on the data the concept of fixed and variable costs has also been discussed.
Solution 1
The predetermined variable overhead rate is the allocation rate which is used by the entity for applying the estimated cost of manufacturing overhead to the cost objects for the determined reporting year (Richards, Leigh 2022). As we know that the variable overhead rates contribute to increasing the costs when the level of production is high and decreasing the costs when the level of production is low. Thus the increase in the sales volume will not guarantee that the profit of the entity will also increase. The overhead costs incurred in the production are classified under two categories such as fixed costs and variable costs. The variable cost changes with the change in the level of output such as utility expense and the fixed costs are the ones that remain the same at all levels of output such as depreciation expense (Habas, Cathy 2022).
Predetermined overhead rate = Estimate manufacturing overhead costs to be incurred in the period/ Estimated allocation base for the period
Let us understand this with the help of an example: The company uses direct labor hours for assigning the manufacturing overhead cost to the job orders. The estimated manufacturing overhead for the period is $6,000. It has been estimated that 600 direct labor hours will be used in the given period.
Predetermined overhead rate = $6,000/ 600 hours = $ 10 per direct labor hour
Let us say that the sales volume is 30000 units and the repairing will consume 1200 labor hours and packaging expenses consume 8800 labor hours at the level of 30000 units based on the predetermined overhead rate the amount of repairing expense amounts to $12,000 and the cost of packaging is $88,000.
Income Statement under variable costing
    Particulars
    Amount ($)
    
    
    Sales revenue (25 * 30000)
    750,000
    Less: Variable expenses
    
    Direct material
    15,000
    Direct labor
    85,000
    Repairing expense
    12,000
    Packaging
    88,000
    Total variable expenses
    200,000
    Contribution margin (Sales- variable expense)
    550,000
    Less: Fixed expenses
    
    Rent
    35,000
    Depreciation
    45,000
    Advertising
    33,000
    Salary
    17,000
    Total fixed costs
    130,000
    Operating income
    420,000
Solution 2
In this, the departmental expenses are allocated for the Cozy Bookstore. The entity is reporting the total amount of the direct and indirect costs...
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