Exam 7: Super-Variable Costing

(Appendix 6A) Letcher 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 56,000 units and sold 54,000 units. The company's only product is sold for $227 per unit. -The company is considering using either super-variable costing or a variable costing system that assigns $11 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?

The super-variable costing net operating income period can be computed by multiplying the number of units sold by the gross margin per unit.

Under super-variable costing,which of the following is treated as a period cost?

Drucker Corporation manufactures and sells one product.In the company's first year of operations,the variable cost consisted solely of direct materials of $84 per unit.The annual fixed costs were $288,000 of direct labor cost,$1,728,000 of fixed manufacturing overhead expense,and $782,000 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 24,000 units and sold 17,000 units.The company's only product is sold for $249 per unit. Required: a.Assume the company uses super-variable costing.Compute the unit product cost for the year. b.Assume the company uses super-variable costing.Prepare an income statement for the year.

(Appendix 6A) Labadie 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 25,000 units and sold 22,000 units. The company's only product is sold for $251 per unit. -The unit product cost under super-variable costing is:

(Appendix 6A) Buckbee 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 37,000 units and sold 32,000 units. The company's only product is sold for $261 per unit. -Assume that the company uses a variable costing system that assigns $17 of direct labor cost to each unit that is produced.The unit product cost under this costing system is:

(Appendix 6A) Buckbee 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 37,000 units and sold 32,000 units. The company's only product is sold for $261 per unit. -The net operating income for the year under super-variable costing is:

Super-variable costing is a costing method mat treats direct labor and manufacturing overhead costs as product costs.

(Appendix 6A) Tremble 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 49,000 units and sold 45,000 units. The company's only product is sold for $233 per unit. -The net operating income for the year under super-variable costing is: