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Exam 19: Variable Costing and Analysis

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Question 61

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Given Advanced Company's data,and the knowledge that the product is sold for $50 per unit and operating expenses are $200,000,compute the net income under variable costing.

A) $55,000
B) $67,500
C) $80,500
D) $122,500
E) $205,000

F) B) and E)
G) A) and E)

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Question 62

Multiple Choice

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Given the Scavenger Company data,what is net income using variable costing?

A) $201,250
B) $181,250
C) $150,000
D) $177,600
E) $276,250

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

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Question 63

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Income ________ when there is zero beginning inventory and all inventory units produced are sold.

Accurate Metal Company sold 32,000 units of its product at a price of $250 per unit.Total variable cost per unit is $150,consisting of $145 in variable production cost and $5 in variable selling and administrative cost.Compute the manufacturing margin for the company under variable costing.

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

Milton Company reports the following information for the current year: If the company's cost per unit of finished goods using absorption costing is $18,what is total fixed overhead?

Variable costing is the only acceptable basis for both external reporting and tax reporting.

Variable costing separates variable costs from fixed costs and therefore makes it easier to identify and assign control over costs.

When units produced equal units sold,reported income is identical under absorption costing and variable costing.

Blatt Company,a manufacturer of slippers,began operations on June 1 of the current year.During this time,the company produced 210,000 units and sold 185,000 units at a sales price of $40 per unit.Cost information for this period is shown in the following table: a.Prepare Blatt's December 31st income statement for the current year under absorption costing. b.Prepare Blatt's December 31st income statement for the current year under variable costing.

A company is currently operating at 80% capacity producing 5,000 units.Current cost information relating to this production is shown in the table below: The company has been approached by a customer with a request for a 100-unit special order.What is the minimum per unit sales price that management would accept for this order if the company wishes to increase current profits?

Home Base,Inc.reports the following production cost information: Assume that productions costs have remained the same since the previous period and all units are sold for $137.00 per unit. a.Compute production cost per unit under variable costing. b.Compute production cost per unit under absorption costing. c.Determine net income using variable costing. d.Determine net income using absorption costing.

Lukin Corporation reports the following first year production cost information. a.Compute production cost per unit under variable costing. b.Compute production cost per unit under absorption costing. c.Determine the cost of ending inventory using variable costing. d.Determine the cost of ending inventory using absorption costing.

Swisher,Incorporated reports the following annual cost data for its single product: This product is normally sold for $48 per unit.If Swisher increases its production to 50,000 units,while sales remain at the current 30,000 unit level,by how much would the company's income increase or decrease under variable costing?

Alexis Co.reported the following information for May: -What is the contribution margin for Part A?

Contribution margin is the excess of sales over total variable costs.

Swisher,Incorporated reports the following annual cost data for its single product: This product is normally sold for $48 per unit.If Swisher increases its production to 50,000 units,while sales remain at the current 30,000 unit level,by how much would the company's income increase or decrease under absorption costing?

Since fixed costs remain constant in the short run,special orders should be accepted as long as the order price is greater than the variable costs.

When there are zero units in beginning Finished Goods Inventory and more units are produced than sold,the income will be lower under variable costing than under absorption costing.

Given Advanced Company's data,and the knowledge that the product is sold for $50 per unit and operating expenses are $200,000,compute the net income under absorption costing.