Answer the following questions using the information below: Greene Manufacturing incurred the following expenses during 2015: \[\begin{array} { l c } \text { Fixed manufacturing costs } & \$ 112,500 \\ \text { Fixed nonmanufacturing costs } & \$ 87,500 \\ \text { Unit selling price } & \$ 250 \\ \text { Total unit cost } & \$ 100 \\ \text { Variable manufacturing cost rate } & \$ 50 \\ \text { Units produced } & 1,340 \text { units } \end{array}\] -What will be the breakeven point in units if absorption costing is used?

A) 1,330 units B) 1,000 units C) 887 units D) 563 units A) 1,330 units B) 1,000 units C) 887 units D) 563 units

Jarvis Golf Company sells a special putter for $20 each.In March,it sold 28,000 putters while manufacturing 30,000.There was no beginning inventory on March 1.Production information for March was: \[\begin{array} { l r } \text { Direct manufacturing labor per unit } & 15 \text { minutes } \\ \text { Fixed selling and administrative costs } & \$ 40,000 \\ \text { Fixed manufacturing overhead } & 132,000 \\ \text { Direct materials cost per unit } & 2 \\ \text { Direct manufacturing labor per hour } & 24 \\ \text { Variable manufacturing overhead per unit } & 4 \\ \text { Variable selling expenses per unit } & 2 \end{array}\] Required: a.Compute the cost per unit under both absorption and variable costing. b.Compute the ending inventories under both absorption and variable costing. c.Compute operating income under both absorption and variable costing.

The answer of Jarvis Golf Company sells a special putter...

Jean Peck's Furniture's manufactures tables for hospitality sector. It takes only bulk orders and each table is sold for $300 after negotiations. In the month of January, it manufactures 3,000 tables and sells 2,250 tables. Actual fixed costs are the same as the amount fixed costs budgeted for the month. The following information is provided for the month of January: $\begin{array}{ll} \text { Variable manufacturing costs } & \$ 120 \text { per unit } \\ \text { Fixed manufacturing costs } & \$ 90,000 \text { per month } \\ \text { Fixed Administrative expenses } & \$ 25,000 \text { per month } \end{array}$ At the end of the month Jean Peck's Furniture's has an ending inventory of finished goods of 750 units. The company also incurs a sales commission of $10 per unit. -What is the operating income when using absorption costing?

A) $337,500 B) $312,500 C) $290,000 D) $260,500 A) $337,500 B) $312,500 C) $290,000 D) $260,500

Exam 9: Inventory Costing and Capacity Analysis

Answer the following questions using the information below: Veach Corporation incurred fixed manufacturing costs of $6,000 during 2015. Other information for 2015 includes: The budgeted denominator level is 1,000 units. Units produced total 750 units. Units sold total 600 units. Beginning inventory was zero. The company uses variable costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold. -Operating income using variable costing will be ________ than operating income if using absorption costing.

(Multiple Choice)

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Question 21

Many companies have switched from absorption costing to variable costing for internal reporting ________.

(Multiple Choice)

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Question 22

The breakeven points are the same under both variable costing and absorption costing.

(True/False)

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Question 23

Answer the following questions using the information below: Greene Manufacturing incurred the following expenses during 2015: Fixed manufacturing costs \ 112,500 Fixed nonmanufacturing costs \ 87,500 Unit selling price \ 250 Total unit cost \ 100 Variable manufacturing cost rate \ 50 Units produced 1,340 units -What will be the breakeven point in units if absorption costing is used?

(Multiple Choice)

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Question 24

Practical capacity is the level of capacity that reduces theoretical capacity by considering unavoidable operating interruptions,such as scheduled maintenance time and shutdowns for holidays.

(True/False)

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Question 25

A company should use the same denominator level capacity for all the budgets and other purposes so as to facilitate comparability and avoid misrepresentation.

(True/False)

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Question 26

Throughput costing is also called ________.

(Multiple Choice)

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Question 27

Which of the following statements is true of absorption costing?

(Multiple Choice)

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Question 28

Jarvis Golf Company sells a special putter for $20 each.In March,it sold 28,000 putters while manufacturing 30,000.There was no beginning inventory on March 1.Production information for March was: Direct manufacturing labor per unit 15 minutes Fixed selling and administrative costs \ 40,000 Fixed manufacturing overhead 132,000 Direct materials cost per unit 2 Direct manufacturing labor per hour 24 Variable manufacturing overhead per unit 4 Variable selling expenses per unit 2 Required: a.Compute the cost per unit under both absorption and variable costing. b.Compute the ending inventories under both absorption and variable costing. c.Compute operating income under both absorption and variable costing.

(Essay)

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Question 29

The gross-margin format is used for ________.

(Multiple Choice)

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Question 30

Should a company with high fixed costs and unused capacity raise selling prices to try to fully recoup its costs?

(Essay)

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Question 31

________ is subtracted from sales while calculating contribution margin.

(Multiple Choice)

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Question 32

Jean Peck's Furniture's manufactures tables for hospitality sector. It takes only bulk orders and each table is sold for $300 after negotiations. In the month of January, it manufactures 3,000 tables and sells 2,250 tables. Actual fixed costs are the same as the amount fixed costs budgeted for the month. The following information is provided for the month of January: Variable manufacturing costs \ 120 per unit Fixed manufacturing costs \ 90,000 per month Fixed Administrative expenses \ 25,000 per month At the end of the month Jean Peck's Furniture's has an ending inventory of finished goods of 750 units. The company also incurs a sales commission of $10 per unit. -What is the operating income when using absorption costing?

(Multiple Choice)

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Question 33

The difference between operating incomes under variable costing and absorption costing centers on how to account for ________.

(Multiple Choice)

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Question 34

The only difference between variable and absorption costing is the expensing of ________.

(Multiple Choice)

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Question 35

Using master-budget capacity to set selling prices ________.

(Multiple Choice)

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Question 36

The production-volume variance,which relates only to fixed manufacturing overhead,exists under absorption costing but not under variable costing.

(True/False)

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Question 37

Answer the following questions using the information below: Veach Corporation incurred fixed manufacturing costs of $6,000 during 2015. Other information for 2015 includes: The budgeted denominator level is 1,000 units. Units produced total 750 units. Units sold total 600 units. Beginning inventory was zero. The company uses variable costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold. -The production-volume variance totals ________.

(Multiple Choice)

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(87)

Question 38

Rich Glasses manufactures glass bottles.January and February operations were identical in every way except for the planned production. January had a production denominator of 74,000 units. February had a production denominator of 66,600 units. Fixed manufacturing costs totaled $222,000. Sales for both months totaled 62,000 units with variable manufacturing costs of $4 per unit.Selling and administrative costs were $0.60 per unit variable and $51,000 of fixed.The selling price was $10 per unit. Required: Compute the operating income for both months using absorption costing.

(Essay)

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Question 39

Which of the following is true of variable costing?

(Multiple Choice)

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Question 40

Showing 21 - 40 of 211

Many companies have switched from absorption costing to variable costing for internal reporting ________.

The breakeven points are the same under both variable costing and absorption costing.

Practical capacity is the level of capacity that reduces theoretical capacity by considering unavoidable operating interruptions,such as scheduled maintenance time and shutdowns for holidays.

A company should use the same denominator level capacity for all the budgets and other purposes so as to facilitate comparability and avoid misrepresentation.

Throughput costing is also called ________.

Which of the following statements is true of absorption costing?

The gross-margin format is used for ________.

Should a company with high fixed costs and unused capacity raise selling prices to try to fully recoup its costs?

________ is subtracted from sales while calculating contribution margin.

The difference between operating incomes under variable costing and absorption costing centers on how to account for ________.

The only difference between variable and absorption costing is the expensing of ________.

Using master-budget capacity to set selling prices ________.

The production-volume variance,which relates only to fixed manufacturing overhead,exists under absorption costing but not under variable costing.

Which of the following is true of variable costing?

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, direct-Cost Variances, and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, transfer Pricing, and Multinational Considerations

Performance Measurement, compensation, and Multinational Considerations

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