E-trax,Inc.has provided the following financial information for the year: \[\begin{array} { | l | r | } \hline \text { Finished Goods Inventory: } & \\ \hline \text { Beginning balance, in units } & 630 \\ \hline \text { Units produced } & 2,800 \\ \hline \text { Units sold } & \underline { 2,900 } \\ \hline \text { Ending balance, in units } & \underline { 530 } \\ \hline \text { Production costs: } \\ \hline \begin{array} { l } \text { Nariable manufacturing costs per } \\ \text { unit } \end{array} & \$ 60 \\ \hline \text { Total fixed manufacturing costs } & \$ 42,000 \\ \hline \end{array}\] What is the unit product cost for the year using absorption costing?

A) $75 B) $79 C) $127 D) $74 A) $75 B) $79 C) $127 D) $74

Isphase,Inc.has provided the following financial data for the year ended December 31,2017: \[\begin{array} { | l | r | l|} \hline \text { Units produced and sold } & 3,500& \text { units } \\ \hline \text { Sales price } & \$ 220 &\text { per unit } \\ \hline \text { Direct materials } & \$ 25& \text { per unit } \\ \hline \text { Direct labor } & \$ 45 &\text { per unit } \\ \hline \text { Variable manufacturing overhead } & \$ 30 &\text { per unit } \\ \hline \text { Variable selling and administrative costs } & \$ 20 &\text { per unit } \\ \hline \text { Fixed manufacturing overhead } & \$ 105,000 &\text { per year } \\ \hline \text { Fixed selling and administrative costs } & \$ 140,000 &\text { per year } \\ \hline \end{array}\] There are no beginning inventories.Prepare an income statement for the year using the traditional format.

Isphase, Inc. Income Statement Year Ende

Joe's Tires,Inc.reports the following information for the year ended December 31: \[\begin{array} { | l | r | } \hline \text { Units sold } & { 590 \text { units } } \\ \hline \text { Sales price } & \$ 200 \text { per unit } \\ \hline \text { Direct materials } & \$ 27 \text { per unit } \\ \hline \text { Direct labor } & \$ 9 \text { per unit } \\ \hline \text { Variable manufacturing overhead } & \$ 16 \text { per unit } \\ \hline \text { Fixed manufacturing overhead } & \$ 30 \text { per unit } \\ \hline \text { Variable selling and administrative costs } & \$ 5 \text { per unit } \\ \hline \text { Fixed selling and administrative costs } & \$ 12,500 \text { per year } \\ \hline \end{array}\] The operating income calculated using variable costing and absorption costing amounted to $9,200 and $11,900,respectively.There were no beginning inventories.Determine the total fixed manufacturing overhead that will be expensed under absorption costing for the year.

A) $20,400 B) $17,700 C) $33,630 D) $30,680 A) $20,400 B) $17,700 C) $33,630 D) $30,680

Heung,Inc.reports the following information for the year ended December 31: \[\begin{array} { | l | r | } \hline \text { Units sold } & \text { 560units } \\ \hline \text { Sales price } & \$ 140 \text { per unit } \\ \hline \text { Direct materials } & \$ 29 \text { per unit } \\ \hline \text { Direct labor } & \$ 8 \text { per unit } \\ \hline \text { Variable manufacturing overhead } & \$ 13 \text { per unit } \\ \hline \text { Fixed manufacturing overhead } & \$ 20 \text { per unit } \\ \hline \text { Variable selling and administrative costs } & \$ 5 \text { per unit } \\ \hline \text { Fixed selling and administrative costs } & \$ 13,200 \text { per year } \\ \hline \end{array}\] The operating income calculated using variable costing and absorption costing amounted to $9,000 and $10,800,respectively.There were no beginning inventories.Determine the total fixed manufacturing overhead that will be expensed under variable costing for the year 2016.

A) $13,000 B) $11,200 C) $27,440 D) $28,000 A) $13,000 B) $11,200 C) $27,440 D) $28,000

Oxygen,Inc.reports the following information: \[\begin{array} { | l | r | } \hline \text { Units produced } & 2,500 \text { units } \\ \hline \text { Units sold } & 2,000 \text { units } \\ \hline \text { Sales price } & \$ 200 \text { per unit } \\ \hline \text { Direct materials } & \$ 40 \text { per unit } \\ \hline \text { Direct labor } & \$ 25 \text { per unit } \\ \hline \text { Variable manufacturing overhead } & \$ 20 \text { per unit } \\ \hline \text { Fixed manufacturing overhead } & \$ 90,000 \text { per year } \\ \hline \text { Variable selling and administrative costs } & \$ 15 \text { per unit } \\ \hline \text { Fixed selling and administrative costs } & \$ 75,000 \text { per year } \\ \hline \end{array}\] Assume that the production costs and sales prices were the same in the previous year.Assume no beginning inventories. Requirements:

A) Calculate unit product cost using absorption costing and variable costing. B) Calculate the operating income using absorption costing and variable costing. A) Calculate unit product cost using absorption costing and variable costing. B) Calculate the operating income using absorption costing and variable costing.

The phone bill for Ace Accounting consists of both fixed and variable costs.Refer to the four month data below and apply the high-low method to answer the question.(Round your intermediate calculations to two decimal places.) \[\begin{array} { | l | r | r | } \hline & \text { Minutes } & \text { Total Bill } \\ \hline \text { May } & 480 & \$ 3,400 \\ \hline \text { June } & 210 & \$ 2,680 \\ \hline \text { July } & 175 & \$ 2,650 \\ \hline \text { August } & 330 & \$ 2,875 \\ \hline \end{array}\] What is the fixed portion of the total cost?

A) $976.90 B) $1,788.70 C) $2,219.20 D) $2,650.00 A) $976.90 B) $1,788.70 C) $2,219.20 D) $2,650.00

Exam 21: Cost-Volume-Profit Analysis

Lacey sells hand-knit scarves at the flea market.Each scarf sells for $50.Lacey pays $30 to rent a vending space for one day.The variable costs are $15 per scarf.What total revenue amount does she need to earn to break even?

(Multiple Choice)

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Question 181

Pfeiffer Company incurs both fixed and variable production costs.Assuming the production is within the relevant range,if volume goes up by 25%,then the total costs would ________.

(Multiple Choice)

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(80)

Question 182

E-trax,Inc.has provided the following financial information for the year: Finished Goods Inventory: Beginning balance, in units 630 Units produced 2,800 Units sold Ending balance, in units Production costs: Nariable manufacturing costs per unit \ 60 Total fixed manufacturing costs \ 42,000 What is the unit product cost for the year using absorption costing?

(Multiple Choice)

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Question 183

Isphase,Inc.has provided the following financial data for the year ended December 31,2017: Units produced and sold 3,500 units Sales price \ 220 per unit Direct materials \ 25 per unit Direct labor \ 45 per unit Variable manufacturing overhead \ 30 per unit Variable selling and administrative costs \ 20 per unit Fixed manufacturing overhead \ 105,000 per year Fixed selling and administrative costs \ 140,000 per year There are no beginning inventories.Prepare an income statement for the year using the traditional format.

(Essay)

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Question 184

Schmidt Company sells glass vases at a wholesale price of $3 per unit.The variable cost of manufacture is $1.75 per unit.The fixed costs are $18,000 per month.Schmidt sold 5,500 units during this month.Calculate Schmidt's operating income (loss)for this month.

(Multiple Choice)

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Question 185

Sales mix,or product mix,is the combination of products that make up total sales.

(True/False)

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Question 186

Neptune Company sold 4,000 units in November at a price of $35 per unit.The variable cost is $22 per unit.The monthly fixed costs are $10,000.What is the operating income earned in November?

(Multiple Choice)

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Question 187

In absorption costing,fixed manufacturing overhead is expensed ________.

(Multiple Choice)

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Question 188

Fontana Pizza Company sells pizzas in two different sizes-medium and large.The number of medium pizzas sold is twice the number of large pizzas sold.The contribution margin of a medium pizza is $12 and the contribution margin of a large pizza is $18.The weighted average contribution margin is $15.

(True/False)

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Question 189

Joe's Tires,Inc.reports the following information for the year ended December 31: Units sold 590 units Sales price \ 200 per unit Direct materials \ 27 per unit Direct labor \ 9 per unit Variable manufacturing overhead \ 16 per unit Fixed manufacturing overhead \ 30 per unit Variable selling and administrative costs \ 5 per unit Fixed selling and administrative costs \ 12,500 per year The operating income calculated using variable costing and absorption costing amounted to $9,200 and $11,900,respectively.There were no beginning inventories.Determine the total fixed manufacturing overhead that will be expensed under absorption costing for the year.

(Multiple Choice)

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Question 190

The high-low method is used to ________.

(Multiple Choice)

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Question 191

Which of the following is considered a period cost under variable costing but not under absorption costing?

(Multiple Choice)

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Question 192

Heung,Inc.reports the following information for the year ended December 31: Units sold 560units Sales price \ 140 per unit Direct materials \ 29 per unit Direct labor \ 8 per unit Variable manufacturing overhead \ 13 per unit Fixed manufacturing overhead \ 20 per unit Variable selling and administrative costs \ 5 per unit Fixed selling and administrative costs \ 13,200 per year The operating income calculated using variable costing and absorption costing amounted to $9,000 and $10,800,respectively.There were no beginning inventories.Determine the total fixed manufacturing overhead that will be expensed under variable costing for the year 2016.

(Multiple Choice)

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Question 193

In absorption costing,all product costs are recorded first as assets in the inventory accounts.

(True/False)

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Question 194

The margin of safety can be used to evaluate a company's plans for the future.

(True/False)

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Question 195

Both the traditional income statement approach and the contribution margin approach will yield the same answer for net income.

(True/False)

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Question 196

For every unit that is produced but not sold,absorption costing "hides" some of the fixed manufacturing overhead in ending Finished Goods Inventory.

(True/False)

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Question 197

Oxygen,Inc.reports the following information: Units produced 2,500 units Units sold 2,000 units Sales price \ 200 per unit Direct materials \ 40 per unit Direct labor \ 25 per unit Variable manufacturing overhead \ 20 per unit Fixed manufacturing overhead \ 90,000 per year Variable selling and administrative costs \ 15 per unit Fixed selling and administrative costs \ 75,000 per year Assume that the production costs and sales prices were the same in the previous year.Assume no beginning inventories. Requirements:

(Multiple Choice)

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Question 198

The phone bill for Ace Accounting consists of both fixed and variable costs.Refer to the four month data below and apply the high-low method to answer the question.(Round your intermediate calculations to two decimal places.) Minutes Total Bill May 480 \ 3,400 June 210 \ 2,680 July 175 \ 2,650 August 330 \ 2,875 What is the fixed portion of the total cost?

(Multiple Choice)

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Question 199

A company's proportion of fixed costs to variable costs is called its ________.

(Multiple Choice)

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Question 200

Lacey sells hand-knit scarves at the flea market.Each scarf sells for $50.Lacey pays $30 to rent a vending space for one day.The variable costs are $15 per scarf.What total revenue amount does she need to earn to break even?

Pfeiffer Company incurs both fixed and variable production costs.Assuming the production is within the relevant range,if volume goes up by 25%,then the total costs would ________.

Schmidt Company sells glass vases at a wholesale price of $3 per unit.The variable cost of manufacture is $1.75 per unit.The fixed costs are $18,000 per month.Schmidt sold 5,500 units during this month.Calculate Schmidt's operating income (loss)for this month.

Sales mix,or product mix,is the combination of products that make up total sales.

Neptune Company sold 4,000 units in November at a price of $35 per unit.The variable cost is $22 per unit.The monthly fixed costs are $10,000.What is the operating income earned in November?

In absorption costing,fixed manufacturing overhead is expensed ________.

Fontana Pizza Company sells pizzas in two different sizes-medium and large.The number of medium pizzas sold is twice the number of large pizzas sold.The contribution margin of a medium pizza is $12 and the contribution margin of a large pizza is $18.The weighted average contribution margin is $15.

The high-low method is used to ________.

Which of the following is considered a period cost under variable costing but not under absorption costing?

In absorption costing,all product costs are recorded first as assets in the inventory accounts.

The margin of safety can be used to evaluate a company's plans for the future.

Both the traditional income statement approach and the contribution margin approach will yield the same answer for net income.

For every unit that is produced but not sold,absorption costing "hides" some of the fixed manufacturing overhead in ending Finished Goods Inventory.

A company's proportion of fixed costs to variable costs is called its ________.

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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