Cozy Bookstore Case Study CLA2 Variable upward can be depicted as those overheads that typically change straightforwardly corresponding and like the varieties in the particular creation exercises, cost drivers, some remarkable volume measures or deals movement (Schiff, 1987). The ramifications is that an increment or reduction in the expense causes a corresponding increment or abatement in the expense or volume driver. On a similar note, the variable expense change proportionately and comparatively to the results or the association's movement levels (Hasan, 2015). In such manner, variable expenses are commonly founded on the exercises given that an organization normally brings about them because of the action, work done or yield. This suggests that in the event that the association's result significantly increases, costs will likewise significantly increase (Largay, 1973). Also, shutting down an organization for quite a while, no factor costs will be caused. Accepting that Green Valley produces noodle, the organization will require unrefined components like sugar, different flavors, salt, flour, sodium bicarbonate, vegetable oils, and starch (Fu, 2008). On a similar note, the organization will without a doubt enlist work and concentrated machines to settle the item. In this way, the item should be bundled in very much planned bundles (Hyun et al., 2011). In this case, variable costing includes direct costs, work and unrefined substances. The presumption here is that Green Valley should buy material per bundle at Rs 2. It additionally needs to cater for the work in view of the piece rate framework where they offer five rupees for every parcel. Also, the organization needs to cause different backhanded costs incorporate 10,000 rupees for the creation site's lease. Creation gear is supposed to deteriorate (Del Giudice et al., 2016) with 20,000 rupees. In addition, the publicizing costs are 20,000 rupees, with sales rep commission costing three rupees for every bundle. Then again, Green Valley intends to deliver 10,000 bundles and charges 25 rupees for every parcel. Based on the above information; Total variable costs of manufacturing each packet = Direct Expenses + Labor + Materials= 2 + 5 + 2= 9 rupees for each packet. The Total variable cost for distribution and selling costs for each packet = Labelling and packaging + Commission paid to the salesmen.= 5 + 2 = 5 Rupees for every packet. Total variable cost for the noodles = 14 Rupees each packet Total fixed manufacturing cost = compensation + Depreciation + Rent= 20, 000 + 20, 000 + 10, 000= 50, 000 Rupees. Total fixed distribution as well as selling cost = Warehouse rent + Advertising= 20, 000 + 10, 000 = 30, 000 Rupees. Total fixed cost = 80, 000 Rupees. Green Valley Corporation Variable costing based income statement Particulars Amount Amount Sales Revenue (10, 000 * 25) 250, 000 Less: Variable Cost Material for 2 10, 000 Labor for 5 50, 000 Sales commission for 3 30, 000 Direct exp ...

1. Cozy Bookstore Case Study CLA2
Variable upward can be depicted as those overheads that
typically change straightforwardly corresponding and like the
varieties in the particular creation exercises, cost drivers, some
remarkable volume measures or deals movement (Schiff, 1987).
The ramifications is that an increment or reduction in the
expense causes a corresponding increment or abatement in the
expense or volume driver. On a similar note, the variable
expense change proportionately and comparativel y to the results
or the association's movement levels (Hasan, 2015). In such
manner, variable expenses are commonly founded on the
exercises given that an organization normally brings about them
because of the action, work done or yield. This suggests that in
the event that the association's result significantly increases,
costs will likewise significantly increase (Largay, 1973). Also,
shutting down an organization for quite a while, no factor costs
will be caused.
Accepting that Green Valley produces noodle, the organization
will require unrefined components like sugar, different flavors,
salt, flour, sodium bicarbonate, vegetable oils, and starch (Fu,
2008). On a similar note, the organization will without a doubt
enlist work and concentrated machines to settle the item. In this
way, the item should be bundled in very much planned bundles
(Hyun et al., 2011). In this case, variable costing includes direct
costs, work and unrefined substances. The presumption here is
that Green Valley should buy material per bundle at Rs 2. It
additionally needs to cater for the work in view of the piece rate
framework where they offer five rupees for every parcel. Also,
the organization needs to cause different backhanded costs
incorporate 10,000 rupees for the creation site's lease. Creation

2. gear is supposed to deteriorate (Del Giudice et al., 2016) with
20,000 rupees. In addition, the publicizing costs are 20,000
rupees, with sales rep commission costing three rupees for
every bundle. Then again, Green Valley intends to deliver
10,000 bundles and charges 25 rupees for every parcel.
Based on the above information;
Total variable costs of manufacturing each packet = Direct
Expenses + Labor + Materials= 2 + 5 + 2= 9 rupees for each
packet.
The Total variable cost for distribution and selling costs for
each packet = Labelling and packaging + Commission paid to
the salesmen.= 5 + 2 = 5 Rupees for every packet.
Total variable cost for the noodles = 14 Rupees each packet
Total fixed manufacturing cost = compensation + Depreciation
+ Rent= 20, 000 + 20, 000 + 10, 000= 50, 000 Rupees.
Total fixed distribution as well as selling cost = Warehouse rent
+ Advertising= 20, 000 + 10, 000 = 30, 000 Rupees.
Total fixed cost = 80, 000 Rupees.
Green Valley Corporation
Variable costing based income statement
Particulars
Amount
Amount
Sales Revenue (10, 000 * 25)
250, 000
Less: Variable Cost
Material for 2
10, 000
Labor for 5
50, 000
Sales commission for 3

3. 30, 000
Direct expense for 2
10, 000
Labeling and packaging for 2
20, 000
(120, 000)
Contribution Margin
130, 000
Less: Fixed Cost
Depreciation
20, 000
Advertising
30, 000
Factory Rent
10, 000
Warehouse Rent
10, 000
Material staff compensation
20, 000
(90, 000)
Income form production
40, 000
In the given situation there are two assistance divisions and
three working offices inside an organization. Make a
departmental cost portion bookkeeping sheet for the

4. organization.
The promoting office assigns their costs to the working
divisions based on the deals. The publicizing divisi on has S24,
000 in costs to designate. Every office has a specific measure of
deals. The deal for that division is partitioned by the absolute
deals of the organization to decide the rate to apportion to every
office. This rate is then duplicated by the publicizing division's
costs to decide the assignment sum.
Department
Cost
Allocation Basis
Advertising
24000
Sales
Department
Sales
% of Total
Allocation
Books
495000
0.55
13200
Magazine
198000
0.22
5280
Newspaper
207000
0.23
5520
Total
900000
1
24000

5. The buying division allots their costs to the working offices
based on the quantity of procurement orders by every division.
The buying office has $34;000 in costs to apportion. Every
office has a specific amount of procurement orders. The amount
of procurement orders for that division is partitioned by the all -
out amount of procurement orders for the whole to decide the
rate to allot to every office. The buying office's costs to decide
the designation sum then duplicate this rate.
Department
Cost
Allocation Basis
Purchase
34000
Sales
Department
Purchase order
% of Total
Allocation
Books
516
0.43
14620
Magazine
360
0.3
10200
Newspaper
324
0.27
9180
Total
1200
1

6. 34000
The resulting departmental expenses allocation speared sheet
for the company.
Expenses
Advertising
Purchase
Book
Magazine
Newspaper
Total departmental expenses
698,000
24,000
34,000
425,000
90,000
125,000
Service Department Expenses
Advertising Dep (Sales base)
-24,000
13200
5280
5520
Purchasing Dep (Purchase order)
-34,000

7. 14,280
10540
9180
Total expenses allocate to operating department
698,000
0
0
452,480
105,820
139,700
Particulars
Total amount
Variable Cost per
Fixed Cost per Year
($)
unit ($
($)
Variable items:
Direct Materials
975, 000
65
Direct Labor
225, 000
15
Machinery Repairs
60, 000
4
Utilities

8. 45, 000
3
Packaging
75, 000
5
Shipping
105, 000
7
Total Variable Cost
1, 485, 000
Fixed Items:
Depreciation – Plant
300, 000
300, 000
Equipment
Utilities
150, 000
150, 000
Plant Management
200, 000
200, 000

9. Salaries
Sales Salaries
250, 000
250, 000
Advertising
125, 000
125, 000
Salaries
241, 000
241, 000
Entertainment expense
90, 000
90, 000
Total Fixed Cost
1, 356, 000
Particulars
$
Sales Revenue
3, 000, 000
Less: Variable Costs
1, 485, 000
Contribution Margin
1, 515, 000
Less: Fixed Costs
1, 356, 000
Net Operating Income
159, 000

10. Fixed Costs
$ 1, 356, 000
Contribution Margin per Unit
$ 101
Break-Even Point
13, 426 units
Therefore, to break even, the company has to sell 13,426 items
which will give total sales cost =
$2,685,200 (Wild & Shaw, 2019).
Income statement:
Particulars
Flexible Budget
Flexible Budget for:
Variable Amount per Unit
Total Fixed Costs
Unit Sales
Unit Sales
Unit Sales
Unit Sales
12000
14000
16000
18000
Sales Revenue
$200
$2,400,000

11. $2,800,000
$3,200,000
$3,600,000
Variable Manufacturing Costs
Direct Materials
$65
$780,000
$910,000
$1,040,000
$1,170,000
Direct Labor
$15
$180,000
$210,000
$240,000
$270,000
Machinery Materials
$4
$48,000
$56,000
$64,000
$72,000
Utilities
$3
$36,000
$42,000

12. $48,000
$54,000
Packaging
$5
$60,000
$70,000
$80,000
$90,000
Shipping
$7
$84,000
$98,000
$112,000
$126,000
Total Variable Costs
$99
$1,188,000
$1,386,000
$1,584,000
$1,782,000
Contribution Margin
$101
$1,212,000
$1,414,000
$1,616,000
$1,818,000
Fixed Costs:

13. Depreciation –Plant Equipment
300000
300000
300000
300000
300000
Utilities
150000
150000
150000
150000
150000
Plant Management
200000
200000
200000
200000
200000
Salaries
Sales Salaries
250000
250000
250000
250000
250000

14. Advertising
125000
125000
125000
125000
125000
Salaries
241000
241000
241000
241000
241000
Entertainment expense
90000
90000
90000
90000
90000
Total Fixed Costs
1356000
1356000
1356000
1356000
1356000
Net income
($144,000)
$58,000
$260,000
$462,000

15. References:
Davis, J. M. (1998). Project feasibility using breakeven point
analysis. Appraisal Institute, 66(1), 41-45.
https://www.proquest.com/scholarly-journals/project-
feasibility-using-
breakeven-point/docview/199944718/se-2?accountid=158986
Novin, A. M. (1992). Applying Overhead: How to Find the
Right Bases and Rates. Institute of Management Accountants,
73(9), 40. https://www.proquest.com/scholarly-
journals/applying-overhead-how-find-right-bases-
rates/docview/229742735/se-2?
accountid=158986
Stapleton, D., Hanna, J. B., Yagla, S., Johnson, J., Markussen,
D. (2002). Measuring logistics performance using the strategic
profit model. Emerald Group Publishing Limited, 13(1), 89-107.
https://dx.doi.org/10.1108/09574090210806388
Tucker, M. W. (1982). Flexible Budgeting as a Management
Tool. SAGE PUBLICATIONS, INC., 6(4), 10.
https://www.proquest.com/scholarly-journals/flexible-
budgeting-as-
management-tool/docview/213812761/se-2?accountid=158986
Wild, J., & Shaw, K. (2019). Financial and managerial
accounting: Information for decisions
(8th ed.). McGraw-Hill

16. For this assignment, develop a 5-page response containing
written narrative, figures, and charts.
You should strictly follow the APA 7th and provide peer-review
articles as references.
%%%%%Plagiarism 0 tolerance%%%%
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

17. 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
Grading rubric:
Criteria
Performance Indicators
(Observation descriptors indicating extent to which criterion is
met.)
Level 4
Exemplary

18. Level 3
Proficient
Level 2
Needs Improvement
Level 1
Unsatisfactory
No Submission
Points
4
3
2
1
0
Depth
30% of overall grade
Content indicates synthesis of ideas, in depth analysis, and
evidence of original thought and support for the topic.
30 points
Content indicates original thinking and develops ideas with
sufficient and firm evidence.
22.5 points
Content indicates thinking and reasoning applied with original
thought on a few ideas.
15 points
Content indicates some thinking and reasoning but most ideas
are unoriginal or underdeveloped.
7.5 points
0 points
Resources

19. 25% of overall grade
All evidence supports arguments and is relevant to the topic.
The student uses the required number and type of resources
identified in the syllabus to support his/her argument.
25 points
Most evidence supports arguments and is relevant to the topic.
The student uses 75% of the required number and type of
resources identified in the syllabus to support his/her argument.
18.75 points
Some evidence supports arguments and is relevant to the topic.
The student uses 50% of the required number of sources.
12.5 points
Limited evidence to support arguments, with few sources
relevant to the topic. The student uses less than 50% of the
required number of sources.
6.25 points
0 points
Organization
15% of overall grade
Paper has a high degree of attention to logic and reasoning of
points. Paper clearly leads the reader to the conclusion and stirs
thought regarding the topic.
15 points
Paper is coherent and logically organized with transitions used
between ideas and paragraphs to create coherence. Overall unity
of ideas is present.
11.25 points

20. Paper is somewhat structured and logically organized. Some
points remain misplaced and stray from the topic. Transitions
evident but not used throughout.
7.5 points
Paper is limited in logical organization with major errors.
3.75 points
0 points
Mechanics
15% of overall grade
Paper is free of distracting spelling, punctuation, and
grammatical errors.
15 points
Paper has few spelling, punctuation, and grammatical errors
allowing the reader to follow ideas clearly.
11.25 points
Most spelling, punctuation, and grammar are correct, which
allows the reader to progress through the paper. Some errors
remain.
7.5 points
Spelling, punctuation, and grammatical errors create distraction,
making reading difficult. Errors are frequent.
3.75 points
0 points
Formatting
15% of overall grade
Paper meets all formatting guidelines and assignment
requirements, including page-length and APA formatting
requirements. Paper is correctly assembled with a professional

21. look.
15 points
The paper follows most formatting guidelines, including page-
length and APA formatting requirements.Paper is correctly
assembled.
11.25 points
Paper generally follows formatting guidelines and assignment
requirements, including page-length and APA formatting
requirements. Paper has some assembly errors
7.5 points
Paper does not follow formatting guidelines and assignment
requirements, including page -length and APA format
requirements. Paper has major assembly errors
3.75 points
0 points
1