FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 19: Variable Costing and Analysis

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

True/False

Review LaterAdd Note

Review Later

Assume a company had the following production costs: Under absorption costing,the total product cost per unit when 4,000 units are produced would be $22.50.

A) True
B) False

Correct Answer

verified

Show Answer

Question 32

Multiple Choice

Review LaterAdd Note

Review Later

Pact Company had net income of $972,000 based on variable costing.Beginning and ending inventories were 7,800 units and 5,200 units,respectively.Assume the fixed overhead per unit was $3.61 for both the beginning and ending inventory.What is net income under absorption costing?

A) $962,614
B) $1,018,923
C) $925,077
D) $969,400
E) $981,379

F) A) and D)
G) B) and C)

Correct Answer

verified

Show Answer

Question 33

Multiple Choice

Review LaterAdd Note

When evaluating a special order,management should:

Match the following.

Hayes Inc.provided the following information for the current year: -What is the unit product cost for the year using variable costing?

Sea Company reports the following information regarding its production cost. Compute the product cost per unit under variable costing.

________ is the amount remaining from manufacturing margin after all variable selling,general and administrative expenses have been deducted.

A company reports the following information for its first year of operations: If the company's cost per unit of finished goods using variable costing is $2.02,what is the amount of total fixed overhead?

Digby Company manufactured and sold 37,000 units of its product at a price of $93 per unit.Total variable cost per unit is $60,consisting of $58 in variable production cost and $2 in variable selling and administrative cost.Fixed costs of manufacturing are $350,000. a.Compute the manufacturing margin for the company under variable costing. b.Compute the contribution margin based on this data. c.Compute the gross margin under absorption costing.

Given Advanced Company's data,compute cost per unit of finished goods under absorption costing.

How will net income under variable costing compare to net income under absorption costing in the following three situations? Explain briefly the cause of any differences. (a)Units produced equal units sold (b)Units produced exceed units sold (c)Units produced are less than units sold

Heather,Incorporated reports the following annual cost data for its single product: This product is normally sold for $56 per unit.If Heather increases its production to 80,000 units while sales remain at the current 60,000 unit level,by how much would the company's gross margin increase or decrease under absorption costing? Assume the company has idle capacity to increase current production.

A company is currently operating at 65% capacity producing 12,000 units.Cost information relating to this current production is shown in the following table: The company has been approached by a customer with a request for a special order for 2,000 units.What is the minimum per unit sales price that management would accept for this order if the company wishes to increase current profits?

What costs are treated as product costs under the variable costing method?

For short-term pricing decisions,absorption costing is an appropriate costing method to use.

To convert variable costing income to absorption costing income,management will need to add fixed overhead cost deferred in ending inventory and subtract fixed overhead cost recognized from beginning inventory.

Fields Cutlery,a manufacturer of gourmet knife sets,produced 20,000 sets and sold 23,000 units during the current year.Beginning inventory under absorption costing consisted of 3,000 units valued at $66,000 (Direct materials $12 per unit; Direct labor,$3 per unit; Variable Overhead,$2 per unit,and Fixed overhead,$5 per unit.) All manufacturing costs have remained constant over the 2-year period.At year-end,the company reported the following income statement using absorption costing: 60% of total selling and administrative expenses are variable.Compute net income under variable costing.

Under absorption costing,the product unit cost consists of direct labor,direct materials,variable overhead,and ________.

Reliance Corporation sold 4,000 units of its product at a price of $15 per unit.Total variable cost per unit is $8.50,consisting of $7.75 in variable production cost and $0.75 in variable selling and administrative cost.Compute the contribution margin for the company.

Assume a company sells a given product for $33.28 per unit.How many units must the company sell to break-even if variable selling costs are $1.40 per unit,variable production costs are $23.56 per unit,and total fixed costs are $2,080,000?