Scribd Logo
Upload

Welcome to Scribd!

  • 236 views

    A. $800,000 B. $600,000 C. $440,000 D. $200,000

    Uploaded by

    sino ako
    The number of units produced during the year is 7,500 units.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    A. $800,000 B. $600,000 C. $440,000 D. $200,000

    Uploaded by

    sino ako
    236 views15 pages
    The number of units produced during the year is 7,500 units.

    Original Description:

    kghh

    Original Title

    20391286

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The number of units produced during the year is 7,500 units.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    236 views15 pages

    A. $800,000 B. $600,000 C. $440,000 D. $200,000

    Uploaded by

    sino ako
    The number of units produced during the year is 7,500 units.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 15

    Alvin Inc.

    planned and actually manufactured 200,000


    units of its single product in 2008, its first year of
    operations. Variable manufacturing costs were $30 per
    unit of product. Planned and actual fixed manufacturing
    costs were $600,000, and marketing and administrative
    costs totaled $400,000 in 2004. Alvin sold 120,000 units
    of product in 2008 at a selling price of $40 per unit.
    Alvin’s 2008 operating income using variable costing is

    A. $800,000
    B. $600,000
    C. $440,000
    D. $200,000
    unit.

    10) Alvin’s 2008 operating income using variable costing is


    a. $800,000.
    b. $600,000.
    c. $440,000.
    d. $200,000.
    Sales 120,000  $40/unit $4,800,000
    VC 120,000  $30/unit 3,600,000
    Contribution margin $1,200,000
    Fixed costs ($600,000 + $400,000) 1,000,000
    Operating income 200,000
    ========
    Alvin Inc. planned and actually manufactured 200,000
    units of its single product in 2008, its first year of
    operations. Variable manufacturing costs were $30 per
    unit of product. Planned and actual fixed manufacturing
    costs were $600,000, and marketing and administrative
    costs totaled $400,000 in 2004. Alvin sold 120,000 units
    of product in 2008 at a selling price of $40 per unit.
    Alvin’s 2008 operating income using Absorption costing
    is

    A. $800,000
    B. $600,000
    C. $440,000
    D. $200,000
    11) Alvin’s 2008 operating income using absorption costing is
    a. $840,000.
    b. $800,000.
    c. $440,000.
    d. $200,000.
    11. Sales 120,000  $40 $4,800,000
    COGS
    Variable 3,600,000
    Fixed 360,000*
    3,960,000
    Gross profit 840,000
    Fixed costs 400,000
    Operating income 440,000
    =======

    Fixed manufacturing cost $600,000 / 200,000 units = $3 unit


    $3/unit  120,000 units sold = $360,000
    Selling price per unit $ 130.00

    Variable manufacturing costs per unit $ 62.00

    Variable selling and administrative expenses per unit $ 5.00

    Fixed manufacturing overhead (in total) $ 30,000

    Fixed selling and administrative expenses (in total) $ 8,000

    Units produced during the year 1,500

    Unitsabsorption
    Using sold during year 1,100 for last year?
    costing, what is operating income

    A. $ 39,300
    B. $ 66,300
    C. $219,700
    D. $143,000
    The HF Corporation manufactures and sells toy gyroscopes. The following data
    is related to sales and production of the toy gyroscopes for last year.
    Selling price per unit $ 8.00
    Variable manufacturing costs per unit $ 1.83
    Variable selling and administrative expenses per unit $ 4.45
    Fixed manufacturing overhead (in total) $ 75,000
    Fixed selling and administrative expenses (in total) $ 80,000
    Units produced during the year 500,000
    Units sold during the year 150,000

    Using variable costing, what is the operating income for last year?

    A. $1,200,000
    B. $103,000
    C. $413,000
    D. $258,000
    Explanation: B)
    Sales $8.00 × 150,000 $1,200,000
    Less Variable Mfg cost 150,000 × $1.83
    274,500
    Less Variable Selling exp. 150,000 × $4.45 =
    667,500
    Contribution Margin 258,000
     
    Fixed Manufacturing Overhead 75,000
    Fixed Selling and Administrative Costs 80,000
    Operating Income 103,000
    The HF Corporation manufactures and sells toy gyroscopes. The following data is related to sales and production of
    the toy gyroscopes for last year.
    Selling price per unit $ 8.00
    Variable manufacturing costs per unit $ 1.83
    Variable selling and administrative expenses per unit $ 4.45
    Fixed manufacturing overhead (in total) $ 75,000
    Fixed selling and administrative expenses (in total) $ 80,000
    Units produced during the year 500,000
    Units sold during the year 150,000
    Using absorption costing, what is operating income for last year?

    A. $ 749,500
    B. $ 155,500
    C. $1,200,000
    D. $1,650,500
    Explanation: B) Fixed MOH $ 75,000 divided by
    units produced 500,000 = $0.15 Fixed MOH
    Add Variable manufacturing cost 1.83
    = Total Manufacturing cost 1.98
    × 150,000 sales
    = $297,000 Cost of goods
    sold
     
    So: Sales $8 × 150,000 = $ 1,200,000
    Less Cost of Goods Sold 297,000
    Equals Gross Profit $ 903,000
    Less Variable selling 667,500
    Less fixed selling 80,000
    Operating Income $155,500
    Diff: 3
    Atlantic Company produces a single product. For the
    most recent year, the company's net operating income
    computed by the absorption costing method was $7,400,
    and its net operating income computed by the variable
    costing method was $10,100. The company's unit product
    cost was $17 under variable costing and $22 under
    absorption costing. If the ending inventory consisted of
    1,460 units, the beginning inventory must have been:  

    A.  920 units
    B.  1,460 units
    C.  2,000 units
    D.  12,700 units
    Rugrat Company has the following information for the current year:

    Beginning fixed manufacturing overhead in inventory$190,000


    Fixed manufacturing overhead in production 750,000
    Ending fixed manufacturing overhead in inventory 50,000
    Beginning variable manufacturing overhead in inventory $20,000
    Variable manufacturing overhead in production 100,000
    Ending variable manufacturing overhead in inventory30,000

    What is the difference between operating incomes under


    absorption costing and variable costing?

    A. $140,000
    B. $100,000
    C. $80,000
    D. $10,000
    Craft Company produces a single product. Last
    year, the company had a net operating income
    of $80,000 using absorption costing and
    $74,500 using variable costing. The fixed
    manufacturing overhead cost was $5 per unit.
    There were no beginning inventories. If 21,500
    units were produced last year, then sales last
    year were:
    A. 16,000 units
    B. 20,400 units
    C. 22,600 units
    D. 27,000 units
    Craft Company produces a single product. Last year, the company
    had a net operating income of $80,000 using absorption costing
    and $74,500 using variable costing. The fixed manufacturing
    overhead cost was $5 per unit. There were no beginning
    inventories. If 21,500 units were produced last year, then sales last
    year
    • were:
    • Since absorption costing net operating income was greater than its variable costing net
    operating income by $5,500, it must have deferred $5,500 of fixed manufacturing overhead
    costs in inventory under absorption costing.

    • Fixed manufacturing overhead costs deferred in inventory under absorption costing = Fixed
    manufacturing overhead cost per unit × Increase in units in inventory
    • $5,500 = $5 per unit × Increase in units in inventory
    • Increase in units in inventory = $5,500 ÷ $5 per unit = 1,100 units

    • Therefore, since there were no beginning inventories and 1,100 units of the 21,500 units
    that were produced were in ending inventories, sales must have been 20,400 units
    Roberts Company produces a single product. This year, the
    company's net operating income under absorption costing was
    $2,000 lower than under variable costing.
    The company sold 8,000 units during the year, and its variable
    costs were $8 per unit, of which $2 was variable selling and
    administrative expense.
    If production cost was $10 per unit under absorption costing,
    then how many units did the company produce during the
    year?
    (The company produced the same number of units last year.)

    A. 7,500 units
    B. 7,000 units
    C. 9,000 units
    D. 8,500 units
    Roberts Company produces a single product. This year, the company's net operating income under
    absorption costing was $2,000 lower than under variable costing. The company sold 8,000 units during
    the year, and its variable costs were $8 per unit, of which $2 was variable selling and administrative
    expense. If production cost was $10 per unit under absorption costing, then how many units did the
    company produce during the year? (The company produced the same number of units last year.)

    • Variable production cost per unit = $8 per unit - $2 per unit = $6 per unit
    Absorption unit product cost = Variable production cost per unit + Fixed production cost per unit
    $10 per unit = $6 per unit + Fixed manufacturing overhead cost per unit
    Fixed manufacturing overhead cost per unit = $10 per unit - $6 per unit = $4 per unit

    Since absorption costing net operating income was $2,000 lower than its variable costing net
    operating income, $2,000 of fixed manufacturing overhead cost was released from inventory under
    absorption costing.

    Fixed manufacturing overhead cost released from inventory under absorption costing = Fixed
    manufacturing overhead cost per unit × Decrease in units in inventory
    $2,000 = $4 per unit × Decrease in units in inventory
    Decrease in units in inventory = $2,000 ÷ $4 per unit = 500 units

    Units sold = Units produced + Decrease in units in inventory


    8,000 units = Units produced + 500 units
    Units produced = 8,000 units - 500 units = 7,500 units

    You might also like