Filters
Question type
Study Flashcards

Union Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: Union Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 24,000 units and sold 17,000 units. The company's only product is sold for $232 per unit.The net operating income for the year under super-variable costing is: A) $(256,000) B) $(830,000) C) $(102,000) D) $374,000 The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 24,000 units and sold 17,000 units. The company's only product is sold for $232 per unit.The net operating income for the year under super-variable costing is:


A) $(256,000)
B) $(830,000)
C) $(102,000)
D) $374,000

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

Ober Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Ober Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Required:a. Prepare a contribution format income statement for the month using variable costing.b. Prepare an income statement for the month using absorption costing. Required:a. Prepare a contribution format income statement for the month using variable costing.b. Prepare an income statement for the month using absorption costing.

Correct Answer

verifed

verified

a.Unit product cost under vari...

View Answer

Neef Corporation has provided the following data for its two most recent years of operation: Neef Corporation has provided the following data for its two most recent years of operation: The net operating income (loss) under absorption costing in Year 2 is closest to: A) $87,000 B) $136,000 C) $75,000 D) $186,000 The net operating income (loss) under absorption costing in Year 2 is closest to:


A) $87,000
B) $136,000
C) $75,000
D) $186,000

E) A) and D)
F) A) and C)

Correct Answer

verifed

verified

When unit sales are constant, but the number of units produced fluctuates and everything else remains the same, net operating income under variable costing will:


A) fluctuate in direct proportion to changes in production.
B) remain constant.
C) fluctuate inversely with changes in production.
D) be greater than net operating income under absorption costing.

E) B) and D)
F) C) and D)

Correct Answer

verifed

verified

B

Dallavalle Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: Dallavalle Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 32,000 units and sold 31,000 units. The company's only product is sold for $238 per unit.Assume that the company uses a variable costing system that assigns $10 of direct labor cost to each unit that is produced. The unit product cost under this costing system is: A) $170 per unit B) $214 per unit C) $93 per unit D) $103 per unit The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 32,000 units and sold 31,000 units. The company's only product is sold for $238 per unit.Assume that the company uses a variable costing system that assigns $10 of direct labor cost to each unit that is produced. The unit product cost under this costing system is:


A) $170 per unit
B) $214 per unit
C) $93 per unit
D) $103 per unit

E) B) and C)
F) A) and B)

Correct Answer

verifed

verified

Grandin Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: Grandin Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 44,000 units and sold 41,000 units. The company's only product is sold for $242 per unit.The company is considering using either super-variable costing or a variable costing system that assigns $24 of direct labor cost to each unit that is produced. Which of the following statements is true regarding the net operating income in the first year? A) Super-variable costing net operating income exceeds variable costing net operating income by $72,000. B) Variable costing net operating income exceeds super-variable costing net operating income by $156,000. C) Super-variable costing net operating income exceeds variable costing net operating income by $156,000. D) Variable costing net operating income exceeds super-variable costing net operating income by $72,000. The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 44,000 units and sold 41,000 units. The company's only product is sold for $242 per unit.The company is considering using either super-variable costing or a variable costing system that assigns $24 of direct labor cost to each unit that is produced. Which of the following statements is true regarding the net operating income in the first year?


A) Super-variable costing net operating income exceeds variable costing net operating income by $72,000.
B) Variable costing net operating income exceeds super-variable costing net operating income by $156,000.
C) Super-variable costing net operating income exceeds variable costing net operating income by $156,000.
D) Variable costing net operating income exceeds super-variable costing net operating income by $72,000.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

D

Hayworth Corporation has just segmented last year's income statement into its ten product lines. The chief executive officer (CEO) is curious as to what effect dropping one of the product lines at the beginning of last year would have had on overall company profit. What is the best number for the CEO to look at to determine the effect of this elimination on the net operating income of the company as a whole?


A) the product line's sales dollars
B) the product line's contribution margin
C) the product line's segment margin
D) the product line's segment margin minus an allocated portion of common fixed expenses

E) A) and B)
F) None of the above

Correct Answer

verifed

verified

Tubaugh Corporation has two major business segments--East and West. In December, the East business segment had sales revenues of $690,000, variable expenses of $352,000, and traceable fixed expenses of $104,000. During the same month, the West business segment had sales revenues of $140,000, variable expenses of $56,000, and traceable fixed expenses of $24,000. The common fixed expenses totaled $162,000 and were allocated as follows: $89,000 to the East business segment and $73,000 to the West business segment.The contribution margin of the West business segment is:


A) $84,000
B) $234,000
C) $422,000
D) $145,000

E) A) and B)
F) B) and C)

Correct Answer

verifed

verified

Quates Corporation produces a single product and has the following cost structure: Quates Corporation produces a single product and has the following cost structure: Required:Compute the unit product cost under absorption costing. Show your work! Required:Compute the unit product cost under absorption costing. Show your work!

Correct Answer

verifed

verified

Souffront Corporation manufactures and sells one product. In the company's first year of operations, the variable cost consisted solely of direct materials of $97 per unit. The annual fixed costs were $1,416,000 of direct labor cost, $3,776,000 of fixed manufacturing overhead expense, and $1,650,000 of fixed selling and administrative expense. The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 59,000 units and sold 55,000 units. The company's only product is sold for $251 per unit. The net operating income for the year under super-variable costing is:


A) $1,628,000
B) $1,724,000
C) $1,240,000
D) $1,980,000

E) C) and D)
F) B) and D)

Correct Answer

verifed

verified

Norenberg Corporation manufactures a single product. The following data pertain to the company's operations over the last two years: Norenberg Corporation manufactures a single product. The following data pertain to the company's operations over the last two years: What was the absorption costing net operating income this year? A) $80,000 B) $100,500 C) $108,000 D) $112,200 What was the absorption costing net operating income this year?


A) $80,000
B) $100,500
C) $108,000
D) $112,200

E) C) and D)
F) B) and C)

Correct Answer

verifed

verified

Michelman Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: Michelman Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 34,000 units and sold 31,000 units. The company's only product is sold for $254 per unit.The company is considering using either super-variable costing or an absorption costing system that assigns $28 of direct labor cost and $75 of fixed manufacturing overhead to each unit that is produced. Which of the following statements is true regarding the net operating income in the first year? A) Absorption costing net operating income exceeds super-variable costing net operating income by $309,000. B) Absorption costing net operating income exceeds super-variable costing net operating income by $225,000. C) Super-variable costing net operating income exceeds absorption costing net operating income by $309,000. D) Super-variable costing net operating income exceeds absorption costing net operating income by $225,000. The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 34,000 units and sold 31,000 units. The company's only product is sold for $254 per unit.The company is considering using either super-variable costing or an absorption costing system that assigns $28 of direct labor cost and $75 of fixed manufacturing overhead to each unit that is produced. Which of the following statements is true regarding the net operating income in the first year?


A) Absorption costing net operating income exceeds super-variable costing net operating income by $309,000.
B) Absorption costing net operating income exceeds super-variable costing net operating income by $225,000.
C) Super-variable costing net operating income exceeds absorption costing net operating income by $309,000.
D) Super-variable costing net operating income exceeds absorption costing net operating income by $225,000.

E) None of the above
F) All of the above

Correct Answer

verifed

verified

Variable costing net operating income is usually closer to the net cash flow of a period than is absorption costing net operating income.

A) True
B) False

Correct Answer

verifed

verified

Gardella Corporation has two divisions: Domestic Division and Foreign Division. The following data are for the most recent operating period: Gardella Corporation has two divisions: Domestic Division and Foreign Division. The following data are for the most recent operating period: The common fixed expenses have been allocated to the divisions on the basis of sales.The company's overall break-even sales is closest to: A) $449,317 B) $134,827 C) $470,663 D) $335,836 The common fixed expenses have been allocated to the divisions on the basis of sales.The company's overall break-even sales is closest to:


A) $449,317
B) $134,827
C) $470,663
D) $335,836

E) A) and B)
F) None of the above

Correct Answer

verifed

verified

A company that produces a single product had a net operating income of $65,000 using variable costing and a net operating income of $95,000 using absorption costing. Total fixed manufacturing overhead was $60,000 and production was 10,000 units. This year was the first year of operations. Between the beginning and the end of the year, the inventory level:


A) decreased by 5,000 units
B) increased by 5,000 units
C) decreased by 30,000 units
D) increased by 30,000 units

E) B) and C)
F) B) and D)

Correct Answer

verifed

verified

Borunda Corporation has provided the following data for its two most recent years of operation: Borunda Corporation has provided the following data for its two most recent years of operation: Required: a.Assume the company uses absorption costing. Prepare an income statement for each year. b. Assume the company uses variable costing. Prepare an income statement for each year. c. Prepare a report in good form reconciling the variable costing and absorption costing net incomes. Required: a.Assume the company uses absorption costing. Prepare an income statement for each year. b. Assume the company uses variable costing. Prepare an income statement for each year. c. Prepare a report in good form reconciling the variable costing and absorption costing net incomes.

Correct Answer

verifed

verified

a. Absorption costing unit product costs: 11eb6b8f_61c3_33ff_bf83_131dab673eae_TB8314_00 Absorption costing income statements: 11eb6b8f_61c3_3400_bf83_b194a760e0b9_TB8314_00 b. Variable costing unit product costs: 11eb6b8f_61c3_3401_bf83_837cf197af5f_TB8314_00 Variable costing income statements: 11eb6b8f_61c3_3402_bf83_13352f700768_TB8314_00 c. Reconcile the variable costing and absorption costing net operating incomes: 11eb6b8f_61c3_5b13_bf83_43d6b0ea6e7d_TB8314_00 11eb6b8f_61c3_5b14_bf83_5712e10a09fe_TB8314_00

Succulent Juice Corporation manufactures and sells premium tomato juice by the gallon. Succulent just finished its first year of operations. The following data relates to this first year: Succulent Juice Corporation manufactures and sells premium tomato juice by the gallon. Succulent just finished its first year of operations. The following data relates to this first year: Required: Using absorption costing, prepare Succulent Juice Corporation's income statement for the year. Required: Using absorption costing, prepare Succulent Juice Corporation's income statement for the year.

Correct Answer

verifed

verified

Absorption costing unit product cost = V...

View Answer

Paparelli Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: Paparelli Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 40,000 units and sold 33,000 units. The company's only product is sold for $240 per unit.The net operating income for the year under super-variable costing is: A) $308,000 B) $(252,000) C) $924,000 D) $448,000 The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 40,000 units and sold 33,000 units. The company's only product is sold for $240 per unit.The net operating income for the year under super-variable costing is:


A) $308,000
B) $(252,000)
C) $924,000
D) $448,000

E) None of the above
F) B) and C)

Correct Answer

verifed

verified

Miller Corporation produces a single product. The company had the following results for its first two years of operation: Miller Corporation produces a single product. The company had the following results for its first two years of operation: In Year 1, the company produced and sold 40,000 units of its only product; in Year 2, the company again sold 40,000 units, but increased production to 50,000 units. The company's variable production cost is $5 per unit and its fixed manufacturing overhead cost is $600,000 a year. Fixed manufacturing overhead costs are applied to the product on the basis of each year's unit production (i.e., a new fixed manufacturing overhead rate is computed each year). Variable selling and administrative expenses are $2 per unit sold. Required: a.Compute the unit product cost for each year under absorption costing and under variable costing. b. Prepare a contribution format income statement for each year using variable costing. c. Reconcile the variable costing and absorption costing income figures for each year. d. Explain why the net operating income for Year 2 under absorption costing was higher than the net operating income for Year 1, although the same number of units were sold in each year. In Year 1, the company produced and sold 40,000 units of its only product; in Year 2, the company again sold 40,000 units, but increased production to 50,000 units. The company's variable production cost is $5 per unit and its fixed manufacturing overhead cost is $600,000 a year. Fixed manufacturing overhead costs are applied to the product on the basis of each year's unit production (i.e., a new fixed manufacturing overhead rate is computed each year). Variable selling and administrative expenses are $2 per unit sold. Required: a.Compute the unit product cost for each year under absorption costing and under variable costing. b. Prepare a contribution format income statement for each year using variable costing. c. Reconcile the variable costing and absorption costing income figures for each year. d. Explain why the net operating income for Year 2 under absorption costing was higher than the net operating income for Year 1, although the same number of units were sold in each year.

Correct Answer

verifed

verified

a. Cost per unit under absorption costin...

View Answer

Kern Corporation produces a single product. Selected information concerning the operations of the company follow: Kern Corporation produces a single product. Selected information concerning the operations of the company follow: Assume that direct labor is a variable cost.Which costing method, absorption or variable costing, would show a higher operating income for the year and by what amount? A) Absorption costing net operating income would be higher than variable costing net operating income by $2,500. B) Variable costing net operating income would be higher than absorption costing net operating income by $2,500. C) Absorption costing net operating income would be higher than variable costing net operating income by $5,500. D) Variable costing net operating income would be higher than absorption costing net operating income by $5,500. Assume that direct labor is a variable cost.Which costing method, absorption or variable costing, would show a higher operating income for the year and by what amount?


A) Absorption costing net operating income would be higher than variable costing net operating income by $2,500.
B) Variable costing net operating income would be higher than absorption costing net operating income by $2,500.
C) Absorption costing net operating income would be higher than variable costing net operating income by $5,500.
D) Variable costing net operating income would be higher than absorption costing net operating income by $5,500.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

Showing 1 - 20 of 392

Related Exams

Exam 1

Managerial Accounting and Cost Concepts

346 Questions

Exam 2

Job-Order Costing: Calculating Unit Product Costs

408 Questions

Exam 3

Job-Order Costing: Cost Flows and External Reporting

314 Questions

Exam 4

Process Costing

365 Questions

Exam 5

Cost-Volume-Profit Relationships

396 Questions

Exam 7

Activity-Based Costing: a Tool to Aid Decision Making

382 Questions

Exam 8

Master Budgeting

284 Questions

Exam 9

Flexible Budgets and Performance Analysis

491 Questions

Exam 10

Standard Costs and Variances

469 Questions

Exam 11

Responsibility Accounting Systems

335 Questions

Exam 12

Strategic Performance Measurement

153 Questions

Exam 13

Differential Analysis: the Key to Decision Making

432 Questions

Exam 14

Capital Budgeting Decisions

405 Questions

Exam 15

Statement of Cash Flows

221 Questions

Exam 16

Financial Statement Analysis

327 Questions

Show Answer