Response to the following multiple choice questions:
1. Jeter Corporation had net income of $216,000 based on variable costing. Beginning and ending inventories were 6,400 units and 10,800 units, respectively. Assume the fixed overhead per unit was $6 for both the beginning and ending inventory. What is net income under absorption costing?
• $242,400
• $216,000
• $319,200
• $268,800
• $280,800
2. Alexis Co. reported the following information for May:
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Part A
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Units sold
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5,600 units
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Selling price per unit
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$860
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Variable manufacturing cost per unit
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550
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Sales commission per unit - Part A
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86
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What is the manufacturing margin for Part A?
• $3,080,000
• $1,254,400
• $4,334,400
• $1,736,000
3. Sea Company reports the following information regarding its production cost.
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Units produced
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56,000 units
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Direct labor
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$49 per unit
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Direct materials
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$42 per unit
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Variable overhead
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$31per unit
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Fixed overhead
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$119,000 in total
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Compute the product cost per unit under variable costing.
• $124.13
• $122.00
• $49.00
• $91.00
• $42.00
4. Brush Industries reports the following information for May:
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Sales
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$
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1,000,000
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Fixed cost of goods sold
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120,000
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Variable cost of goods sold
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270,000
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Fixed selling and administrative costs
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120,000
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Variable selling and administrative costs
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145,000
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Calculate the operating income for May under absorption costing.
• $585,000
• $610,000
• $730,000
• $345,000
5. Shore Company reports the following information regarding its production cost.
Units produced 31,000 units
Direct labor $ 26 per unit
Direct materials $ 27 per unit
Variable overhead $ 283,000 in total
Fixed overhead $ 97,920 in total
Compute product cost per unit under absorption costing.
• $65.29
• $27.00
• $62.00
• $53.00
• $26.00
6. Accurate Metal Company sold 35,500 units of its product at a price of $320 per unit. Total variable cost per unit is $175, consisting of $166 in variable production cost and $9 in variable selling and administrative cost. Compute the manufacturing margin for the company under variable costing.
• $6,212,500
• $6,532,000
• $5,147,500
• $11,360,000
• $5,467,000
7. Decko Industries reported the following monthly data:
Units produced 64,000 units
Sales price $ 45 per unit
Direct materials $ 2.70 per unit
Direct labor $ 3.70 per unit
Variable overhead $ 4.70 per unit
Fixed overhead $ 235,200 in total
What is the company's contribution margin for this month if 62,000 units were sold?
• $2,169,600
• $2,101,800
• $2,880,000
• $2,393,200
• $2,790,000
8. Alexis Co. reported the following information for May:
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Part A
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Units sold
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5,800
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units
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Selling price per unit
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$
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950
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Variable manufacturing cost per unit
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600
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Sales commission per unit - Part A
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95
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What is the contribution margin for Part A?
• $2,030,000
• $1,479,000
• $3,480,000
• $4,959,000
9. Given the following data, calculate product cost per unit under absorption costing.
Direct labor $ 13 per unit
Direct materials $ 7 per unit
Overhead
Total variable overhead $ 26,000
Total fixed overhead $ 96,000
Expected units to be produced 46,000 units
• $24.00 per unit
• $20.57 per unit
• $22.09 per unit
• $22.65 per unit
• $20.00 per unit
10. Brush Industries reports the following information for May:
Sales $ 960,000
Fixed cost of goods sold 112,000
Variable cost of goods sold 262,000
Fixed selling and administrative costs 112,000
Variable selling and administrative costs 137,000
Calculate the gross margin for May under absorption costing.
• $586,000
• $361,000
• $585,000
• $698,000
11. Geneva Co. reports the following information for July:
Sales $ 783,000
Variable costs 236,000
Fixed costs 111,000
Calculate the contribution margin for July.
• $436,000
• $672,000
• $783,000
• $547,000
12. Kluber, Inc. had net income of $916,000 based on variable costing. Beginning and ending inventories were 56,600 units and 55,200 units, respectively. Assume the fixed overhead per unit was $2.05 for both the beginning and ending inventory. What is net income under absorption costing?
• $801,405
• $910,260
• $1,030,595
• $913,130
• $916,000
13. During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $6 per unit, Direct labor, $4 per unit, Variable overhead, $5 per unit, and Fixed overhead, $234,000. The company produced 26,000 units, and sold 18,000 units, leaving 8,000 units in inventory at year-end. What is the value of ending inventory under variable costing?
• $120,000
• $234,000
• $72,000
• $192,000
14. Hayes Inc. provided the following information for the current year:
Beginning inventory 120 units
Units produced 770 units
Units sold 813 units
Selling price $ 170 /unit
Direct materials $ 37 /unit
Direct labor $ 18 /unit
Variable manufacturing overhead $ 17 /unit
Fixed manufacturing overhead $ 26,180 /yr
Variable selling/administrative costs $ 10 /unit
Fixed selling/administrative costs $ 17,500 /yr
What is the unit product cost for the year using absorption costing?
• $106
• $104
• $82
• $72
15. Urban Company reports the following information regarding its production cost:
Units produced 33,000 units
Direct labor $ 26 per unit
Direct materials $ 31 per unit
Variable overhead $ 233,000 in total
Fixed overhead $ 123,000 in total
Compute production cost per unit under variable costing.
• $57.00
• $60.73
• $64.06
• $26.00
• $31.00
16. During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $5 per unit, Direct labor, $3 per unit, Variable overhead, $4 per unit, and Fixed overhead, $189,000. The company produced 21,000 units, and sold 15,500 units, leaving 5,500 units in inventory at year-end. What is the value of ending inventory under absorption costing?
• $49,500
• $115,500
• $189,000
• $66,000
17. Hayes Inc. provided the following information for the current year:
Beginning inventory 250 units
Units produced 900 units
Units sold 957 units
Selling price $ 300 /unit
Direct materials $ 50 /unit
Direct labor $ 31 /unit
Variable manufacturing overhead $ 30 /unit
Fixed manufacturing overhead $ 42,300 /yr
Variable selling/administrative costs $ 23 /unit
Fixed selling/administrative costs $ 30,500 /yr
What is the unit product cost for the year using variable costing?
• $111
• $134
• $158
• $202
18. Chance, Inc. sold 5,000 units of its product at a price of $172 per unit. Total variable cost per unit is $131, consisting of $92 in variable production cost and $39 in variable selling and administrative cost. Compute the manufacturing margin for the company under variable costing.
• $400,000
• ($450,000)
• $460,000
• $860,000
• $655,000
19. Front Company had net income of $92,500 based on variable costing. Beginning and ending inventories were 2,800 units and 5,200 units, respectively. Assume the fixed overhead per unit was $8.90 for both the beginning and ending inventory. What is net income under absorption costing?
• $71,140
• $21,300
• $93,900
• $163,700
• $113,860
20. Sea Company reports the following information regarding its production costs:
Units produced 58,000 units
Direct labor $ 51 per unit
Direct materials $ 44 per unit
Variable overhead $ 33 per unit
Fixed overhead $ 145,000 in total
Compute the product cost per unit under absorption costing.
• $51.00
• $44.00
• $130.50
• $128.00
• $95.00
21. During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $5 per unit, Direct labor, $3 per unit, Variable overhead, $4 per unit, and Fixed overhead, $363,000. The company produced 33,000 units, and sold 27,000 units, leaving 6,000 units in inventory at year-end. Income calculated under variable costing is determined to be $385,000. How much income is reported under absorption costing?
• $319,000
• $385,000
• $451,000
• $748,000
22. Reliance Corporation sold 5,100 units of its product at a price of $26 per unit. Total variable cost per unit is $14.00, consisting of $13.30 in variable production cost and $0.70 in variable selling and administrative cost. Compute the contribution margin for the company.
• $67,830
• $74,970
• $61,200
• $71,400
• $132,600
23. Required information
[The following information applies to the questions displayed below.]
Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year.
Units produced this year 42,000 units
Units sold this year 25,200 units
Direct materials $ 26 per unit
Direct labor $ 28 per unit
Variable overhead $ 126,000 in total
Fixed overhead $ 210,000 in total
Given Advanced Company's data, compute cost per unit of finished goods under variable costing.
• $54.00
• $59.00
• $57.00
• $62.00
• $55.88
24. Required information
[The following information applies to the questions displayed below.]
Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year.
Units produced this year 42,000 units
Units sold this year 25,200 units
Direct materials $ 26 per unit
Direct labor $ 28 per unit
Variable overhead $ 126,000 in total
Fixed overhead $ 210,000 in total
Given Advanced Company's data, compute cost per unit of finished goods under absorption costing.
• $62.00
• $67.33
• $59.00
• $54.00
• $57.00
25. Required information
[The following information applies to the questions displayed below.]
Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year.
Units produced this year 42,000 units
Units sold this year 25,200 units
Direct materials $ 26 per unit
Direct labor $ 28 per unit
Variable overhead $ 126,000 in total
Fixed overhead $ 210,000 in total
Given Advanced Company's data, compute cost of finished goods in inventory under absorption costing.
• $1,562,400
• $1,041,600
• $957,600
• $1,436,400
• $2,604,000
26. Required information
[The following information applies to the questions displayed below.]
Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year.
Units produced this year 42,000 units
Units sold this year 25,200 units
Direct materials $ 26 per unit
Direct labor $ 28 per unit
Variable overhead $ 126,000 in total
Fixed overhead $ 210,000 in total
Given Advanced Company's data, compute cost of finished goods in inventory under variable costing.
• $1,562,400
• $2,604,000
• $1,041,600
• $1,436,400
• $957,600
27. Required information
[The following information applies to the questions displayed below.]
Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year.
Units produced this year 42,000 units
Units sold this year 25,200 units
Direct materials $ 26 per unit
Direct labor $ 28 per unit
Variable overhead $ 126,000 in total
Fixed overhead $ 210,000 in total
Given Advanced Company's data, and the knowledge that the product is sold for $82 per unit and operating expenses are $370,000, compute the net income under absorption costing.
• $134,000
• $50,000
• $260,000
• $335,160
• $84,000
28. Required information
[The following information applies to the questions displayed below.]
Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year.
Units produced this year 42,000 units
Units sold this year 25,200 units
Direct materials $ 26 per unit
Direct labor $ 28 per unit
Variable overhead $ 126,000 in total
Fixed overhead $ 210,000 in total
Given Advanced Company's data, and the knowledge that the product is sold for $82 per unit and operating expenses are $370,000, compute the net income under variable costing.
• $50,000
• $378,400
• $134,000
• $335,160
• $84,000
29. Required information
[The following information applies to the questions displayed below.]
Red and White Company reported the following monthly data:
Units produced 3,900 units
Sales price $ 44 per unit
Direct materials $ 8 per unit
Direct labor $ 9 per unit
Variable overhead $ 10 per unit
Fixed overhead $ 8,970 in total
What is Red and White's contribution margin for this month if 1,170 units were sold?
• $171,600
• $51,480
• $19,890
• $39,780
• $66,300
30. Required information
[The following information applies to the questions displayed below.]
Red and White Company reported the following monthly data:
Units produced 3,900 units
Sales price $ 44 per unit
Direct materials $ 8 per unit
Direct labor $ 9 per unit
Variable overhead $ 10 per unit
Fixed overhead $ 8,970 in total
What is Red and White's net income under absorption costing if 1,170 units are sold and selling and administrative expenses are $14,200?
• $10,920
• $2,999
• $5,690
• ($1,330)
• ($3,280)
31. Required information
[The following information applies to the questions displayed below.]
Red and White Company reported the following monthly data:
Units produced 3,900 units
Sales price $ 44 per unit
Direct materials $ 8 per unit
Direct labor $ 9 per unit
Variable overhead $ 10 per unit
Fixed overhead $ 8,970 in total
What is Red and White's net income under variable costing if 1,170 units are sold and operating expenses are $14,200?
• $5,690
• ($3,280)
• ($1,330)
• $2,999
• $10,920