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Exam 20: Variable Costing for Management Analysis

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Question 21

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In contribution margin analysis,the effect of a difference in the number of units sold,assuming no change in unit sales price or cost,is termed the unit price or unit cost factor.

A) True
B) False

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Question 22

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A business operated at 100% of capacity during its first month and incurred the following costs: ​ If 1,500 units remain unsold at the end of the month,what is the amount of inventory that would be reported on the variable costing balance sheet?

A) $62,500
B) $73,500
C) $60,000
D) $52,500

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

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Question 23

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If the ability to sell and the amount of production facilities devoted to each of two products is equal,it is profitable to increase the sales of that product with the highest contribution margin.

At XLT Inc,variable costs are $80 per unit,and fixed costs are $40,000.Sales are estimated to be 4,000 units.(a)How much would absorption costing income from operations differ between a plan to produce 8,000 units and a plan to produce 10,000 units? (b)How much would variable costing income from operations differ between the two production plans?

Under variable costing,which of the following costs would not be included in finished goods inventory?

In contribution margin analysis,the effect of a difference in unit sales price or unit cost on the number of units sold is termed the quantity factor.

Sales mix is generally defined as the relative distribution of sales among the various products sold.

In a service firm,it may be necessary to have several activity bases to properly match the change in costs with the changes in various activities.

The Excelsior Company has three salespersons.Average sales price per unit sold,average variable manufacturing costs per unit,and number of units sold for each salesperson are shown below. Commissions are earned according to the following schedule: ​ ​ Prepare a contribution by salesperson report.

The contribution margin ratio is computed as:

The relative distribution of sales among various products sold is referred to as the:

Tony's Company has the following information for March: ​ Determine the March (a)manufacturing margin,(b)contribution margin,and (c)income from operations for Tony's Company.

The actual price for a product was $50 per unit,while the planned price was $44 per unit.The volume increased by 4,000 to 60,000 total units.Determine (a)the quantity factor and (b)the price factor for sales.

What is the amount of the income from operations that would be reported on the variable costing income statement?

On the variable costing income statement,variable selling and administrative expenses are deducted from manufacturing margin to yield contribution margin.

In contribution margin analysis,the quantity factor is computed as:

Under absorption costing,increases or decreases in income from operations due to changes in inventory levels could be misinterpreted to be the result of operating efficiencies or inefficiencies.

In contribution margin analysis,the increase or decrease in unit sales price or unit cost on the number of units sold is referred to as the:

For a supervisor of a manufacturing department,which of the following costs is controllable?

Which of the following is(are) reason(s) for easy identification and control of variable manufacturing costs under the variable costing method?