Question

In: Accounting

1. Under absorption costing, a company had the following unit costs when 8,000 units were produced. ...

1. Under absorption costing, a company had the following unit costs when 8,000 units were

produced.


Direct labor	$	8.50	per unit
Direct material	$	9.00	per unit
Variable overhead	$	6.75	per unit
Fixed overhead ($60,000/8,000 units)	$	7.50	per unit
Total production cost	$	31.75	per unit

Compute the total production cost per unit under variable costing if 25,000 units had been produced.

A) $31.75

B) $27.25

C) $26.25

D) $24.25

E) $17.50

2. When evaluating a special order, management should:

A) Only accept the order if the incremental revenue exceeds all product costs.

B) Only accept the order if the incremental revenue exceeds fixed product costs.

C) Only accept the order if the incremental revenue exceeds total variable product costs.

D) Only accept the order if the incremental revenue exceeds full absorption product costs.

E) Only accept the order if the incremental revenue exceeds regular sales revenue.

3. Which of the following best describes costs assigned to the product under the absorption

costing method?

Direct labor (DL)

Direct materials (DM)

Variable selling and administrative (VSA)

Variable manufacturing overhead (VOH)

Fixed selling and administrative (FSA)

Fixed manufacturing overhead (FOH)

A) DL, DM, VSA, and VOH.

B) DL, DM, and VOH.

C) DL, DM, VOH, and FOH.

D) DL and DM.

E) DL, DM, FSA, and FOH.

4. Which of the following best describes costs assigned to the product under the variable

costing method?

Direct labor (DL)

Direct materials (DM)

Variable selling and administrative (VSA)

Variable manufacturing overhead (VOH)

Fixed selling and administrative (FSA)

Fixed manufacturing overhead (FOH)

A) DL, DM, VSA, and VOH.

B) DL, DM, and VOH.

C) DL, DM, VOH, and FOH.

D) DL and DM.

E) DL, DM, FSA, and FOH.

12. Howley Company has the following information for April:

Sales $912,000

VC of goods sold 474,000

FC – mfg. 82,000

VC – selling & adm. 238,000

FC – selling & adm. 54,700

a, Operating Income for Howley during the month of April.

Expert Solution

ekkarill92 answered 1 year ago

Exercise 6-1 Computing unit and inventory costs under absorption costing LO P1 Trio Company reports the...

Exercise 6-1 Computing unit and inventory costs under absorption costing LO P1 Trio Company reports the following information for the current year, which is its first year of operations. Direct materials $ 10 per unit Direct labor $ 17 per unit Overhead costs for the year Variable overhead $ 60,000 per year Fixed overhead $ 120,000 per year Units produced this year 20,000 units Units sold this year 14,000 units Ending finished goods inventory in units 6,000 units Exercise 6-4...

15-2: At a production level of 100 units, the per unit cost under Absorption Costing is...

15-2: At a production level of 100 units, the per unit cost under Absorption Costing is $8, which consists of $2 of direct materials, $2 of direct labor, $2 of variable manufacturing overhead, and $2 of fixed manufacturing overhead. Calculate the Absorption Costing per unit cost assuming the production level is increased to 200 units? 15-3: Hank’s Hot Dog Factory manufactures hot dogs. The factory’s cost structure is as follows: fixed manufacturing costs per month are $8,000. Variable manufacturing costs...

Assume the following information for a company that produced 10,000 units and sold 8,000 units during...

Assume the following information for a company that produced 10,000 units and sold 8,000 units during its first year of operations and produced 8,000 units and sold 10,000 units during its second year of operations: Per Unit Per Year Selling price $ 200 Direct materials $ 82 Direct labor $ 50 Variable manufacturing overhead $ 10 Sales commission $ 8 Fixed manufacturing overhead $ 300,000 Using absorption costing, what is the cost of goods sold for the second year of...

Calculate the unit product cost under absorption costing using the following information.

Calculate the unit product cost under absorption costing using the following information. Direct materials: $50/unit Direct labor: $75/Unit Variable manufacturing overhead:$27/Unit Fixed manufacturing overhead: $30,000 Units produced: 10,000 Units sold: 6,000

Analyzing Income under Absorption and Variable Costing Variable manufacturing costs are $90 per unit, and fixed...

Analyzing Income under Absorption and Variable Costing Variable manufacturing costs are $90 per unit, and fixed manufacturing costs are $95,400. Sales are estimated to be 8,200 units. If an amount is zero, enter "0". Do not round interim calculations. Round final answer to nearest whole dollar. a. How much would absorption costing income from operations differ between a plan to produce 8,200 units and a plan to produce 10,600 units? $fill in the blank 1 b. How much would variable...

Inventory Valuation under Absorption Costing During the most recent year, Judson Company had the following data...

Inventory Valuation under Absorption Costing During the most recent year, Judson Company had the following data associated with the product it makes: Units in beginning inventory 300 Units produced 15,000 Units sold ($300 per unit) 12,700 Variable costs per unit: Direct materials $20 Direct labor $60 Variable overhead $12 Fixed costs: Fixed overhead per unit produced $30 Fixed selling and administrative $140,000 Required: 1. How many units are in ending inventory? $ units 2. Using absorption costing, calculate the per-unit...

Variable Costing—Sales Exceed Production The beginning inventory is 8,000 units. All of the units that were...

Variable Costing—Sales Exceed Production The beginning inventory is 8,000 units. All of the units that were manufactured during the period and 8,000 units of the beginning inventory were sold. The beginning inventory fixed manufacturing costs are $42 per unit, and variable manufacturing costs are $93 per unit. a. Determine whether variable costing operating income is less than or greater than absorption costing operating income. b. Determine the difference in variable costing and absorption costing operating income. $

1. Be able to compute the unit cost under both absorption and variable costing (ie… what...

1. Be able to compute the unit cost under both absorption and variable costing (ie… what costs go into each and what are the difference2. Does variable or absorption costing produce a higher net income when: units produced equal units sold? units produced is greater than units sold? units produced is less than units sold? Is variable or absorption costing acceptable under GAAP? Which is the better method for short-term decisions?

Use the following information for questions 1-5: # of units produced 6,600 Variable Costs per Unit:...

Use the following information for questions 1-5: # of units produced 6,600 Variable Costs per Unit: Direct Materials $46 Direct Labor $16 Variable Manufacturing Overhead $8 Variable Selling & Admin. Expense $4 Fixed Costs per year: Fixed Manufacturing Overhead $234,300 Fixed Selling & Admin $161,700 The Absorption Costing Unit Product Cost is: $100.20 $105.50 $74 $70 The Variable Costing Unit Product Cost is: $70 $74 $105.50 $100.20 If 6,000 units are sold during the period, total period cost under variable...

1. Variable Costing & Absorption Costing Selling price per unit is $50 Manufacturing costs include DM...

1. Variable Costing & Absorption Costing Selling price per unit is $50 Manufacturing costs include DM $11 per unit, DL $6 per unit, VMOH $3 per unit, Fixed MOH $120,000 per year. Selling and administrative costs include $4 per unit and fixed costs of $70,000 per year. Produced 10,000 units; sold 6,000 units. Calculate unit product cost using variable costing. Calculate unit product cost using absorption costing. Which method will produce the highest net income? 2. CVP Analysis Backpacks...