Closet Links Clothing Company provided the following manufacturing costs for the month of June. $\begin{array}{|l|r|} \hline\text { Direct labor cost } & \$ 138,000 \\ \hline \text { Direct materials cost } & 85,000 \\ \hline \text { Equipment depreciation } & \\ \text { (straight-line) } & 24,000 \\ \hline \text { Factory insurance } & 19,000 \\ \hline \text { Factory manager's salary } & 11,000 \\ \hline \text { anitor's salary } & 3000 \\ \hline \text { Packaging costs } & 19,200 \\ \hline \text { Property taxes } & 14,000\\ \hline \end{array}$ From the above information,calculate Closet Link's total variable costs.

A) $313,200 B) $71,000 C) $242,200 D) $223,000 A) $313,200 B) $71,000 C) $242,200 D) $223,000

Barrett,Inc.reports the following information for the year ended December 31: \[\begin{array} { | l | r | c | } \hline \text { Beginning Finished Goods Inventory } & 50 & \text { units } \\ \hline \text { Units produced } & 410 & \text { units } \\ \hline \text { Units sold } & 460 & \text { units } \\ \hline \text { Sales price } & \$ 150 & \text { per unit } \\ \hline \text { Direct materials } & \$ 30 & \text { per unit } \\ \hline \text { Direct labor } & \$ 10 & \text { per unit } \\ \hline \text { Fariable manufacturing overhead } & \$ 16 & \text { per unit } \\ \hline \text { Variable selling and administrative costs } & \$ 15,300 & \text { per year } \\ \hline \text { Fixed selling and administrative costs } & \$ 10 & \text { per unit } \\ \hline \end{array}\] The beginning Finished Goods Inventory costs were $3500 under absorption costing and $2800 under variable costing. What is the operating income using variable costing?

A) $38,640 B) $40,200 C) $9840 D) $2340 A) $38,640 B) $40,200 C) $9840 D) $2340

Khayyam Company,which sells tents,has provided the following information: \[\begin{array} { | l | r | } \hline \text { Sales price per unit } & \$ 45 \\ \hline \text { Variable cost per unit } & 11 \\ \hline \text { Fixed costs per month } & \$ 12,700 \\ \hline \end{array}\] What are the required sales in units for Khayyam to break even? (Round your answer up to the nearest whole unit.)

A) 227 units B) 1155 units C) 283 units D) 374 units A) 227 units B) 1155 units C) 283 units D) 374 units

Arianell,Inc.reports the following information for August: \[\begin{array} { | l | r | } \hline \text { Sales Revenue } & \$ 900,000 \\ \hline \text { Variable Cost of Goods Sold } & 200,000 \\ \hline \text { Fixed Cost of Goods Sold } & 45,000 \\ \hline \text { Variable Selling and Administrative Costs } & 160,000 \\ \hline \text { Fixed Selling and Administrative Costs } & 55,000 \\ \hline \end{array}\] Calculate the gross profit for August using absorption costing.

A) $845,000 B) $740,000 C) $700,000 D) $655,000 A) $845,000 B) $740,000 C) $700,000 D) $655,000

Exam 21: Cost-Volume-Profit Analysis

When units produced exceed units sold,how does operating income differ between variable costing and absorption costing? Assume no beginning Finished Goods Inventory.Explain your answer.

(Essay)

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Question 101

Closet Links Clothing Company provided the following manufacturing costs for the month of June. Direct labor cost \ 138,000 Direct materials cost 85,000 Equipment depreciation (straight-line) 24,000 Factory insurance 19,000 Factory manager's salary 11,000 anitor's salary 3000 Packaging costs 19,200 Property taxes 14,000 From the above information,calculate Closet Link's total variable costs.

(Multiple Choice)

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Question 102

Barrett,Inc.reports the following information for the year ended December 31: Beginning Finished Goods Inventory 50 units Units produced 410 units Units sold 460 units Sales price \ 150 per unit Direct materials \ 30 per unit Direct labor \ 10 per unit Fariable manufacturing overhead \ 16 per unit Variable selling and administrative costs \ 15,300 per year Fixed selling and administrative costs \ 10 per unit The beginning Finished Goods Inventory costs were $3500 under absorption costing and $2800 under variable costing. What is the operating income using variable costing?

(Multiple Choice)

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Question 103

Costs that have both variable and fixed components are called ________.

(Multiple Choice)

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Question 104

Khayyam Company,which sells tents,has provided the following information: Sales price per unit \ 45 Variable cost per unit 11 Fixed costs per month \ 12,700 What are the required sales in units for Khayyam to break even? (Round your answer up to the nearest whole unit.)

(Multiple Choice)

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Question 105

In variable costing,the balance of ending Finished Goods Inventory includes fixed manufacturing overhead.

(True/False)

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Question 106

When there are no units in the beginning Finished Goods Inventory and the units produced are more than the units sold,the operating income will be higher under absorption costing than variable costing.

(True/False)

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Question 107

Mcleod,Inc.incurred fixed costs of $300,000.Total costs,both fixed and variable,are $500,000 when 59,000 units are produced.It sold 35,000 units during the year.Calculate the variable cost per unit.(Round your answer to the nearest cent.)

(Multiple Choice)

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Question 108

The level of inventory on hand at the end of the year does not affect the amount of operating income calculated under variable costing and absorption costing.

(True/False)

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Question 109

Contribution margin is the difference between net sales revenue and variable costs.

(True/False)

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Question 110

When there are no beginning or ending balances in Finished Goods Inventory,variable and absorption costing will result in ________.

(Multiple Choice)

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Question 111

Gitli Company sells its product for $60 and has variable cost of $35 per unit.The total fixed costs are $26,000.What will be the effect on the breakeven point in units if variable cost increases by $5 due to an increase in the cost of direct materials? (Round your answer up to the nearest whole unit.)

(Multiple Choice)

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Question 112

Total variable costs change in direct proportion to changes in the volume of production.

(True/False)

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Question 113

Arianell,Inc.reports the following information for August: Sales Revenue \ 900,000 Variable Cost of Goods Sold 200,000 Fixed Cost of Goods Sold 45,000 Variable Selling and Administrative Costs 160,000 Fixed Selling and Administrative Costs 55,000 Calculate the gross profit for August using absorption costing.

(Multiple Choice)

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Question 114

Louis Petit,a manager of Doggone Gorgeous,Inc.,was reviewing the water bills of a dog daycare and spa.He determined that its highest and lowest bills of $3800 and $2000 were incurred in the months of May and November,respectively.If 600 dogs were washed in May and 200 dogs were washed in November,what was the fixed cost associated with the company's water bill? (Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar.)

(Multiple Choice)

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Question 115

Contribution margin is calculated by deducting the total cost of goods sold from sales revenue.

(True/False)

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Question 116

Steadigen Company sells two generators-Model A and Model B-for $454 per unit and $396 per unit,respectively.The variable cost of Model A is $408 per unit and of Model B is $314 per unit.If Steadigen Company's sales incentives reward sales of the goods with the highest contribution margin per unit,the sales force will be motivated to push sales of Model A more aggressively than Model B.

(True/False)

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Question 117

The degree of operating leverage for Madrigal Company is 2.The actual operating income is $14,000.If the company expects a 25% increase in sales,operating income should increase by $3,500.

(True/False)

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Question 118

Following GAAP,the income statement issued to investors and creditors must ________.

(Multiple Choice)

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Question 119

Which of the following will appear as a line item in the income statement prepared under variable costing?

(Multiple Choice)

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Question 120

Showing 101 - 120 of 295

When units produced exceed units sold,how does operating income differ between variable costing and absorption costing? Assume no beginning Finished Goods Inventory.Explain your answer.

Costs that have both variable and fixed components are called ________.

Khayyam Company,which sells tents,has provided the following information: Sales price per unit \ 45 Variable cost per unit 11 Fixed costs per month \ 12,700 What are the required sales in units for Khayyam to break even? (Round your answer up to the nearest whole unit.)

In variable costing,the balance of ending Finished Goods Inventory includes fixed manufacturing overhead.

When there are no units in the beginning Finished Goods Inventory and the units produced are more than the units sold,the operating income will be higher under absorption costing than variable costing.

Mcleod,Inc.incurred fixed costs of $300,000.Total costs,both fixed and variable,are $500,000 when 59,000 units are produced.It sold 35,000 units during the year.Calculate the variable cost per unit.(Round your answer to the nearest cent.)

The level of inventory on hand at the end of the year does not affect the amount of operating income calculated under variable costing and absorption costing.

Contribution margin is the difference between net sales revenue and variable costs.

When there are no beginning or ending balances in Finished Goods Inventory,variable and absorption costing will result in ________.

Total variable costs change in direct proportion to changes in the volume of production.

Contribution margin is calculated by deducting the total cost of goods sold from sales revenue.

The degree of operating leverage for Madrigal Company is 2.The actual operating income is $14,000.If the company expects a 25% increase in sales,operating income should increase by $3,500.

Following GAAP,the income statement issued to investors and creditors must ________.

Which of the following will appear as a line item in the income statement prepared under variable costing?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

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Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets,natural Resources,and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

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

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