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Exam 19: Variable Costing and Analysis

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Question 21

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Under absorption costing,a company had the following unit costs when 9,000 units were produced. -Compute the total product cost per unit under variable costing if 30,000 units had been produced.

A) $31.75
B) $28.25
C) $23.45
D) $15.25
E) $20.75

F) B) and E)
G) D) and E)

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Question 22

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The bottom line of a contribution margin report is net income.

A) True
B) False

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Question 23

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Under absorption costing,a company had the following unit costs when 9,000 units were produced. -Compute the total product cost per unit under absorption costing if 25,000 units had been produced.

Given the following data,calculate the total product cost per unit under variable costing.

Chance,Inc.sold 3,000 units of its product at a price of $72 per unit.Total variable cost per unit is $51,consisting of $32 in variable production cost and $19 in variable selling and administrative cost.Compute the manufacturing margin for the company under variable costing.

A company reports the following information regarding its production cost: Required: Perform the following independent calculations. a.Compute total variable overhead cost if the production cost per unit under variable costing is $73. b.Compute total variable overhead cost if the production cost per unit under absorption costing is $73.

Fixed costs change in the short run depending upon management's decision to accept or reject special orders.

Jeter Corporation had net income of $212,000 based on variable costing.Beginning and ending inventories were 6,000 units and 10,000 units,respectively.Assume the fixed overhead per unit was $4 for both the beginning and ending inventory.What is net income under absorption costing?

Front Company had net income of $72,500 based on variable costing.Beginning and ending inventories were 800 units and 1,200 units,respectively.Assume the fixed overhead per unit was $7.90 for both the beginning and ending inventory.What is net income under absorption costing?

A variable costing income statement focuses attention on the relationship between costs and sales that is not evident from the absorption costing format.

Fanelli Company had net income of $678,000 based on variable costing.Beginning and ending inventories were 5,000 units and 4,200 units,respectively.Assume the fixed overhead cost per unit was $.50 for both the beginning and ending inventory.What is net income under absorption costing?

Clear Company reports the following information for its first year of operations: If the company's cost per unit of finished goods using absorption costing is $19.30,what is total fixed overhead?

How can the use of absorption costing result in overproduction?

What is Red and White's contribution margin for this month if 980 units were sold?

Maloney Co.provided the following information for the year 20X1: There are no beginning inventories.Prepare an income statement using the variable costing format.

Which of the following statements is true?

Assuming fixed costs remain constant,and a company sells more units than it produces,then income under absorption costing is less than income under variable costing.

On a contribution margin income statement,expenses are grouped according to ________.

How does contribution margin differ from gross margin?

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 net income using variable costing. d.Determine the net income using absorption costing.