Module 1 - CaseAccounting Cost Systems and Cost BehaviorAssignment OverviewPreparation of an Income Statement for The Serious Reader CompanyThe first case of this course provides an opportunity to prepare a segmented variable costing (contribution margin, behavioral) income statement and analyze the information. This is a very small company and the information may seem simplistic at first glance. Don’t forget that numbers and hands-on practice best illustrate many basic accounting concepts.The Serious Reader Company is a small online retailer operating out of a garage apartment. The owner buys books at garage sales, thrift shops, library sales, and whenever an opportunity arises. The company classifies all books into five categories based on cost of acquisition and estimated sales price. See below for details about books purchased and sold during the last year (20XX). Price Categories A B C D E Units Sold 4,000 1,000 500 400 400 Unites Purchased 6,000 1,200 1,000 1,000 1,000 Resale Price $4.00 $12.00 $20.00 $45.00 $60.00 Cost $0.50 $4.00 $10.00 $20.00 $20.00 In addition to purchasing inventory (used books), the company incurs some operating expenses. Variable Operating Expenses Shipping per book $1.50 Common fixed expenses Internet-related costs $10,000 Travel, etc. $4,000 Advertising $1,000 Other overhead $5,000 Case AssignmentRequired:Computations (use Excel)Prepare a segmented variable costing (behavioral) income statement for the company in good format.Prepare a second variable costing statement assuming 90% of all the books in each category purchased were actually sold.Prepare a third variable costing statement assuming that the price is increased by 50% for all five categories (use original sales information).The owner enjoys the used-book business. Any suggestions as how to turn this into a full-time business venture so the owner can quit his other job? Prepare another income statement to support your idea.Memo (use Word)Interpret the results from the computations and explain how the information is useful. Write a 4- or 5-paragraph memo to the owner of the business. Start with an introduction and end with a recommendation. Each of the four or five paragraphs should have a heading.Short essay to comment on the questions below (use Word). Start with an introduction and end with a summary or conclusion. Use headings. Maximum length of two pages.Why do many organizations make the effort to prepare a different type of income statement for internal purposes?Variable costing is not just about preparing income statements. Provide at least three scenarios in which understanding how costs behave is useful.Assignment ExpectationsEach submission should include two files: (1) An Excel file; and (2) A Word document. The Word document shows the memo first and short essay last. Assume a knowledgeable business audience and use required format and length. Individuals in business are busy and want information presented in an organized and concise manner.

Select TWO court cases (from different chapters) from the list below, and respond in writing to the case questions. Kellar v. Summit Seating (Ch 12, p 426)Maestas v. Day & Zimmerman LLC (Ch 12, p 436)Vehar v. Cole National Group (Ch 12, p 449)Helton v. AT&T (Ch 13, p 463)Battoni v. IBEW Local Union No. 102 Employee Pension Plan (Ch 13, p 470)Tussey v. ABB, Inc. (Ch 13, p 478)MasTec Advanced Technologies (Ch 14, p 500)National Labor Relations Board v. RELCO Locomotives (Ch 14, p 512)NLRB v. Whitesell Corp. (Ch 15, p 529) The requirements below must be met for your paper to be accepted and graded:Write between 750 – 1,250 words (approximately 3 – 5 pages) using Microsoft Word in APA style, see example below.Use font size 12 and 1” margins.Include cover page and reference page.At least 80% of your paper must be original content/writing.No more than 20% of your content/information may come from references.Use at least three references from outside the course material, one reference must be from EBSCOhost. Text book, lectures, and other materials in the course may be used, but are not counted toward the three reference requirement.Cite all reference material (data, dates, graphs, quotes, paraphrased words, values, etc.) in the paper and list on a reference page in APA style.References must come from sources such as, scholarly journals found in EBSCOhost, CNN, online newspapers such as, The Wall Street Journal, government websites, etc. Sources such as, Wikis, Yahoo Answers, eHow, blogs, etc. are not acceptable for academic writing. A detailed explanation of how to cite a source using APA can be found here (link). Download an example here Grading Criteria AssignmentsMaximum PointsMeets or exceeds established assignment criteria40Demonstrates an understanding of lesson concepts20Clearly presents well-reasoned ideas and concepts30Uses proper mechanics, punctuation, sentence structure, and spelling10Total100

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