Module 1 - Baber Makayla
csache
module1.pdf
Module 1
Critical Thinking: (60 points) Choose one of the following two assignments to complete this week. Do not do both assignments. Identify your assignment choice in the title of your submission. When you are ready to submit, click the Module 1 Critical Thinking header on the Assignments page to upload the document.
Note that while there are two options for the Critical Thinking assignment, there is only one rubric. Review the rubric to confirm you are meeting the assignment requirements.
Assignment Choice #1: Classification of Costs and Income Statement Felix’s Fine Jewelry produces fine jewelry for department stores. The following costs incurred by the company may be classified as direct materials, direct labor, manufacturing overhead, or period costs.
a. Wages paid to Jewelry workers $ 1,200,000
b. Utilities in the administrative area 300,000
c. Depreciation on chain linking machinery utilized in the plant
200,000
d. Silver, gold, and gemstones used in producing necklaces
4,000,000
e. Company attorney's salary 150,000
f. Lease rental charge on forklift for material and finished goods handling
10,000
g. Telephone expense for customer service office 20,000
h. Wages of plant heating and cooling technicians 100,000
i. Utilities for the assembly area of the plant 250,000
j. Maintenance on computers utilized in the administrative assistant’s office
1,500
k. Salary paid to the CEO 200,000
l. Fine paid for introducing cyanide into the local water supply
1,000,000
m. Signature red jewelry boxes used for packaging 50,000
n. Expedited freight of product to major customer 50,000
Instructions: Classify the costs and total by classification. Assume Felix’s Fine Jewelry’s revenue for the period was $8,000,000 and there is no change in ending inventory. Prepare an operating income statement that shows the deductions of expense in terms of total classification by category: direct materials, direct labor, manufacturing overhead, or period costs.
Provide your answers in clearly organized Excel spreadsheet. Refer to your text to aid you in this assignment. Document your sources.
Check spelling and formatting for readability. All responses must comply with the to Writing and APA Requirements. Be sure to review the Module 1 Critical Thinking grading rubric, which may be accessed through the Course Information page.
Assignment Choice #2: Analyze the Income Statement The following income statement pertains to Stellar Packaging Products, a U.S. producer of coffee packaging, for the period ending August 2016.
Stellar Packaging Company Income Statement For the period ended August 2016 Revenues $ 3,000,000.00
Cost of Goods Sold $ (1,750,000.00)
Gross Margin $ 1,250,000.00
Period (Operating) costs incurred examples: selling, general, and
administrative expenses, etc. $ 345,000
Total operating costs $ 345,000
Operating Income $ 905,000
Instructions: 1. Compute Stellar Packaging’s gross margin and operating profit margin for August 2016. Recall
that the gross margin percentage = gross margin/revenue, and operating profit margin = operating income/revenue.
2. Stellar Packaging’s closest publicly held competitor has a gross margin percentage of 30% and a net profit margin of 10%. Compare Stellar Packaging’s performance for August 2016 to that of its competitor. What do you note regarding relative production cost and relative period costs in this comparison? Which company performed better in the period in question? Explain your answer. Refer to your text to aid in this comparison.
Write a paper that meets the following requirements:
1-2 pages in length including calculations.
Formatted according to to Writing and APA Requirements.
Document your sources.
Be sure to review the Module 1 Critical Thinking grading rubric, which may be accessed through the Course Information page.
