FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 19: Variable Costing and Performance Reporting

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 71

Essay

Review LaterAdd Note

Review Later

Lukin-Evers Corporation reports the following first year production cost information. $\begin{array} { l l } \text { Units produced } & 62,000 \text { units } \\\text { Units sold } & 59,000 \text { units } \\\text { Sales price } & \$ 350 \text { per unit } \\\text { Direct labor } & \$ 41 \text { per unit } \\\text { Direct materials } & \$ 15 \text { per unit } \\\text { Variable overhead } & \$ 9,300,000 \text { in total } \\\text { Fixed overhead } & \$ 4,340,000 \text { in total } \\\text { Operating expenses } & \$ 1,000,000\end{array}$ (a.) Compute production cost per unit under variable costing. (b.) Compute production cost per unit under absorption costing. (c.) Determine the net income using variable costing. (d.) Determine the net income using absorption costing.

Correct Answer

verified

(a.) $41 DL + $15 DM + $9,300,000/62,000...

View Answer

Show Answer

Question 72

Multiple Choice

Review LaterAdd Note

Review Later

Given the following data, calculate product cost per unit under absorption costing. $\begin{array} { | l | c | } \hline \text { Direct labor } & \$ 7 \text { per unit } \\\hline \text { Direct materials } & \$ 1 \text { per unit } \\\hline \text { Overhead } & \\\hline \text { Total variable overhead } & \$ 20,000 \\\hline \text { Total fixed overhead } & \$ 90,000 \\\hline & \\\hline \text { Expected units to be produced } & 40,000 \text { units } \\\hline\end{array}$

A) $8 per unit
B) $8.50 per unit
C) $10.25 per unit
D) $10.75 per unit
E) $12 per unit

Correct Answer

verified

Show Answer

Question 73

Multiple Choice

Review LaterAdd Note

Swisher, Incorporated reports the following annual cost data for its single product. $\begin{array} { l l } \text { Normal production level } & 30,000 \text { units } \\\text { Direct materials } & \$ 6.40 \text { per unit } \\\text { Direct labor } & \$ 3.93 \text { per unit } \\\text { Variable overhead } & \$ 5.80 \text { per unit } \\\text { Fixed overhead } & \$ 150,000 \text { in total }\end{array}$ 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 gross margin increase or decrease under variable costing?

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

Product costs consist of direct labor, direct materials, and _________________.

Using a traditional costing approach, which of the following manufacturing costs are assigned to products?

Given the following data, calculate the total product cost per unit under absorption costing. $\begin{array} { | l | c | } \hline \text { Direct labor } & \$ 3.50 \text { per unit } \\\hline \text { Direct materials } & \$ 1.25 \text { per unit } \\\hline \text { Overhead } & \\\hline \text { Total variable overhead } & \$ 41,400 \\\hline \text { Total fixed overhead } & \$ 150,000 \\\hline & \\\hline \text { Expected units to be produced } & 18,000 \text { units } \\\hline\end{array}$

Given the following data, total product cost per unit under variable costing is $10.75. $\begin{array} { | l | c | } \hline \text { Direct labor } & \$ 7 \text { per unit } \\\hline \text { Direct materials } & \$ 1 \text { per unit } \\\hline \text { Overhead } & \\\hline \text { Total variable overhead } & \$ 20,000 \\\hline \text { Total fixed overhead } & \$ 90,000 \\\hline & \\\hline \text { Expected units to be produced } & 40,000 \text { units } \\\hline\end{array}$

When excess capacity exists managers should accept a special order if the special order price exceeds the ________________________.

Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year. $\begin{array} { l l } \text { Units produced this year } & 25,000 \text { units } \\\text { Units sold this year } & 15,000 \text { units } \\\text { Direct materials } & \$ 9 \text { per unit } \\\text { Direct labor } & \$ 11 \text { per unit } \\\text { Variable overhead } & \$ 75,000 \text { in total } \\\text { Fixed overhead } & \$ 137,500 \text { in total }\end{array}$ -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.

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

The traditional costing approach assigns all manufacturing costs to products.

During a given year, if a company produces more units than it sells, then ending inventory units will be less than beginning inventory units.

It is not possible to convert reports prepared using variable costing to absorption costing reports.

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. $\begin{array} { | l | c | } \hline & \text { Per Unit } \\\hline \text { Sales price } & \$ 34 \\\hline \text { Direct material } & \$ 2 \\\hline \text { Direct labor } & \$ 3 \\\hline \begin{array} { l } \text { Variable } \\\text { overhead }\end{array} & \$ 4 \\\hline \text { Fixed overhead } & \$ 5 \\\hline\end{array}$ 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?

Red and White Company reported the following monthly data. $\begin{array} { l l } \text { Units produced } & 2,000 \text { units } \\\text { Sales price } & \$ 25 \text { per unit } \\\text { Direct materials } & \$ 1 \text { per unit } \\\text { Direct labor } & \$ 2 \text { per unit } \\\text { Variable overhead } & \$ 3 \text { per unit } \\\text { Fixed overhead } & \$ 8,000 \text { in total }\end{array}$ -What is Red White's net income under absorption costing if 980 units are sold and operating expenses are $12,000:

A company reports the following information for its first year of operations. $\begin{array} { l l } \text { Units produced this year } & 650 \text { units } \\\text { Units sold this year } & 500 \text { units } \\\text { Direct materials } & \$ 750 \text { per unit } \\\text { Direct labor } & \$ 1,000 \text { per unit } \\\text { Variable overhead } & ? \text { in total } \\\text { Fixed overhead } & \$ 308,750 \text { in total }\end{array}$ If the company's cost per unit of finished goods using variable costing is $2,375, what is total variable overhead?

Given the following data, calculate product cost per unit under variable costing. $\begin{array} { | l | c | } \hline \text { Direct labor } & \$ 7 \text { per unit } \\\hline \text { Direct materials } & \$ 1 \text { per unit } \\\hline \text { Overhead } & \\\hline \text { Total variable overhead } & \$ 20,000 \\\hline \text { Total fixed overhead } & \$ 90,000 \\\hline & \\\hline \text { Expected units to be produced } & 40,000 \text { units } \\\hline\end{array}$

Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year. $\begin{array} { l l } \text { Units produced this year } & 25,000 \text { units } \\\text { Units sold this year } & 15,000 \text { units } \\\text { Direct materials } & \$ 9 \text { per unit } \\\text { Direct labor } & \$ 11 \text { per unit } \\\text { Variable overhead } & \$ 75,000 \text { in total } \\\text { Fixed overhead } & \$ 137,500 \text { in total }\end{array}$ -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.

Given the following data, total product cost per unit under absorption costing will be $400 greater than total product cost per unit under variable costing. $\begin{array} { | l | c | } \hline \text { Direct labor } & \$ 1.50 \text { per unit } \\\hline \text { Direct materials } & \$ 1.50 \text { per unit } \\\hline \text { Overhead } & \\\hline \text { Total variable overhead } & \$ 900,000 \\\hline \text { Total fixed overhead } & \$ 1,200,000 \\\hline & \\\hline \text { Expected units to be produced } & 3,000 \text { units } \\\hline\end{array}$