Question

1.

MJH company had the following data : 1.) Sales $2160000 2.) Variable production costs $943200 3.) fixed costs- $576,000. On a piece of scrap paper do a variable costing income statement. What is the net income?

		$1,216,800
		Cannot be determined
		$576,000
		$640,800

2.

For variable costing the product cost per unit equals

		Direct materials , direct labor , variable overhead divided by units produced
		Direct labor , fixed overhead , direct materials divided by units produced
		Direct materials, fixed overhead, variable overhead divided by units produced
		Direct labor, direct materials, fixed and variable overhead divided by units produced

3.

Fixed overhead is a product cost deducted when the product is sold.

		constant costing
		contributions margin statement
		variable costing
		absorption costing

4.

MJH company had the following data: 1.) Sales $2160000 2.) Variable production costs $943200 3.) fixed costs-$576,000. On a piece of scrap paper do a variable costing income statement. What is the contribution margin?

		Cannot be determined
		$1,216,800
		$576,000
		$640,800

Answer 1

1)Correct option is "D" - 640800

Net Income under variable costing =Sales-variable expenses-fixedcost

                         = 2160000-943200 - 576000

                         = 640800

2)Correct option is"A"

A product cost is a cost that is incurred to manufacture a product .Under variable costing ,A product cost comprises of Direct material +direct labor +variable manufacturing overhead

Unit product cost under variable costing =[Direct material +direct labor +variable manufacturing overhead]/Units produced

3)Correct option is"D"-absorption costing

Under absorption costing ,a product cost comprises ofDirect material +direct labor +variable manufacturing overhead +Fixed overhead .Thus fixed overhead forms a part of product cost which is deducted when product is sold as against it is charged to income statement as period cost under variable costing

4)correct option is "B" -1216800

Contribution margin =sales -variable cost

                  = 2160000-943200

                  = 1216800