29 Jun uestion Jokkmok Industries
Question
Jokkmok Industries
Mr. Rosen is the manager of a division of Jokkmok Industries. He is one of several managers being considered for the position of CEO, as the current CEO is retiring in a year.
All divisions use standard absorption costing. The division has the capacity to produce 50,000 units a quarter and quarterly fixed overhead amounts to $600,000. Mr. Rosen has been looking at the report for the first three months of the year and is not happy with the results.
Division Income Statement
For the Quarter Ending March 31, 2013
Production: 25,000 units
Sales (25,000 units)
$2,500,000
Cost of goods sold
1,800,000
Gross profit
$700,000
Selling & general expenses
350,000
Net income
$350,000
The sales forecast for the second quarter is 25,000 units. Mr. Rosen had budgeted second quarter production at 25,000 units but changes it to 50,000 units, which is total capacity for a quarter. The sales forecasts for each of the last two quarters of the year remain at 25,000 units. Actual fixed costs incurred remain constant in total and variable costs remain constant on per unit basis.
Case Assignment
Required:
Computations:
· Convert the divisional absorption income statement to a contribution margin income statement for the quarter. showing how to convert from one approach to another. This example is for guidance only and the numbers have no bearing on Jokkmok Industries. You can also find several videos on YouTube that explain the difference between the two types of income statements.
· Prepare absorption and contribution margin income statements for the succeeding quarter for the division.
· Compute production costs per unit for both approaches and for both quarters.
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.