Lilypad Hot Tubs,Inc.reports the following information for August: \[\begin{array} { | l | r | } \hline \text { Sales Revenue } & \$ 650,000 \\ \hline \text { Variable Costs } & 270,000 \\ \hline \text { Fixed Costs } & 73,000 \\ \hline \end{array}\] Calculate the operating income for August using variable costing.

A) $380,000 B) $577,000 C) $307,000 D) $650,000 A) $380,000 B) $577,000 C) $307,000 D) $650,000

Circetrax,Inc.has provided the following financial information for the year: \[\begin{array} { | l | r | } \hline \text { Finished Goods Inventory: } & \\ \hline \text { Beginning balance, in units } & 610 \\ \hline \text { Units produced } & 2800 \\ \hline \text { Units sold } & 2900 \\ \hline \text { Ending balance, in units } & 510 \\ \hline \text { Production costs: } &\\ \hline \text { Variable manufacturing costs per unit } & \$ 50 \\ \hline \text { Total fixed manufacturing costs } & \$ 42,000\\ \hline \end{array}\] What is the unit product cost for the year using absorption costing?

A) $65 B) $82 C) $119 D) $64 A) $65 B) $82 C) $119 D) $64

Petra,Inc.has collected the following data.(There are no beginning inventories.): \[\begin{array} { | l | l | l | } \hline \text { Units produced } & 550 & \text { units } \\ \hline \text { Units sold } & \$ 50 & \text { units } \\ \hline \text { Sales price } & \$ 220 & \text { per unit } \\ \hline \text { Direct materials } & \$ 10 & \text { per unit } \\ \hline \text { Direct labor } & \$ 35 & \text { per unit } \\ \hline \text { Variable manufacturing overhead } & \$ 30 & \text { per unit } \\ \hline \text { Fixed manufacturing overhead } & \$ 15,000 & \text { per year } \\ \hline \text { Variable selling and administrative costs } & \$ 20 & \text { per unit } \\ \hline \text { Fixed selling and administrative costs } & \$ 10,000 & \text { per year } \\ \hline \end{array}\] What is the operating income using absorption costing? (Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar.)

A) $64,750 B) $53,750 C) $43,750 D) $54,750 A) $64,750 B) $53,750 C) $43,750 D) $54,750

Louie's Music produces harmonicas that it sells for $12 each.The company computes a new monthly fixed manufacturing overhead allocation rate based on the planned number of harmonicas to be produced that month.Assume all costs and production levels are exactly as planned.The following data are from Louie's Music's first month in business: \[\begin{array} { | l | r | } \hline \text {January 2019 } & \\ \hline \text { Units produced and sold: } & 1200 \\ \hline \text { Sales in units } & 1400 \\ \hline \text { Production in units } & \$ 4 \\ \hline \text { Sariable manufacturing cost per harmonica } & \$ 1 \\ \hline \text { Total fixed manufacturing overhead } & \$ 2,800 \\ \hline \text { Total fixed selling and administrative costs } & \$ 2,100 \\ \hline \end{array}\] Requirements 1.Compute the product cost per harmonica produced under variable costing. 2.Prepare an income statement for January,2019

Requirement 1 \[\begin{array} { | l | l

Vintage Weaponry is owned and operated by a craftsman who makes replicas of historic firearms for museums,sportsmen,and collectors.He is currently producing 40 flintlock muskets per month.Data are as follows: \[\begin{array} { | l | r | } \hline \text { Sales price per unit } & \$ 800 \\ \hline \text { Variable cost per unit } & 470 \\ \hline \text { Fixed costs per month } & 10,230 \\ \hline \end{array}\] If Vintage expects to sell 60 units per month,how much is his margin of safety expressed in sales revenue?

A) $13,630 B) $24,800 C) $23,200 D) $48,000 A) $13,630 B) $24,800 C) $23,200 D) $48,000

Waterproof Roofing Company has provided the following information: \[\begin{array} { | l | r | } \hline \text { Sales revenue } & \$ 779,000 \\ \hline \text { Variable costs } & 506,000 \\ \hline \text { Fixed costs } & 216,000 \\ \hline \end{array}\] Which of the following statements is TRUE,if the sales volume increases by 10%?

A) Operating income will increase by $50,600. B) Operating income will increase by $27,300. C) Fixed expenses will increase by $21,600. D) Contribution margin will increase by $77,900. A) Operating income will increase by $50,600. B) Operating income will increase by $27,300. C) Fixed expenses will increase by $21,600. D) Contribution margin will increase by $77,900.

McMillan,Inc.has the following cost data: \[\begin{array} { | l | r | l | } \hline \text { Direct materials } & \$ 38 & \text { per unit } \\ \hline \text { Direct labor } & 52 & \text { per unit } \\ \hline \text { Variable manufacturing overhead } & 15 & \text { per unit } \\ \hline \text { Fixed manufacturing overhead } & 10,000 & \text { per year } \\ \hline \end{array}\] Calculate the unit product cost using absorption costing when production is 200 units,400 units,and 800 units.

Absorption costing for 200 units: \[\be

Exam 21: Cost-Volume-Profit Analysis

Lilypad Hot Tubs,Inc.reports the following information for August: Sales Revenue \ 650,000 Variable Costs 270,000 Fixed Costs 73,000 Calculate the operating income for August using variable costing.

(Multiple Choice)

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Question 141

Which of the following appears as a line item in a contribution margin income statement?

(Multiple Choice)

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Question 142

The Buttercrust 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 $10,and the contribution margin of a large pizza is $22.The weighted average contribution margin is $16.00.

(True/False)

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(85)

Question 143

An increase in sales price per unit decreases the contribution margin per unit.

(True/False)

5.0/5

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Question 144

Because contribution margin is based on sales price and variable costs,the contribution margin ratio can be calculated using either the total amounts or the unit amounts.

(True/False)

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Question 145

Circetrax,Inc.has provided the following financial information for the year: Finished Goods Inventory: Beginning balance, in units 610 Units produced 2800 Units sold 2900 Ending balance, in units 510 Production costs: Variable manufacturing costs per unit \ 50 Total fixed manufacturing costs \ 42,000 What is the unit product cost for the year using absorption costing?

(Multiple Choice)

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(92)

Question 146

Petra,Inc.has collected the following data.(There are no beginning inventories.): Units produced 550 units Units sold \ 50 units Sales price \ 220 per unit Direct materials \ 10 per unit Direct labor \ 35 per unit Variable manufacturing overhead \ 30 per unit Fixed manufacturing overhead \ 15,000 per year Variable selling and administrative costs \ 20 per unit Fixed selling and administrative costs \ 10,000 per year What is the operating income using absorption costing? (Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar.)

(Multiple Choice)

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Question 147

Kim Airedale,a manager of Waggers,Inc.,was reviewing the water bills of a dog daycare and spa.She determined that its highest and lowest bills of $3600 and $2800 were incurred in the months of May and November,respectively.If 500 dogs were washed in May and 200 dogs were washed in November,what was the variable cost per dog associated with the company's water bill? (Round your answer to the nearest cent.)

(Multiple Choice)

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Question 148

The relevant production range for Challenger Trailers,Inc.is between 130,000 units and 180,000 units per month.If the company produces beyond 180,000 units per month,________.

(Multiple Choice)

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Question 149

Feldspar,Inc.started the year with 200 units in the Finished Goods Inventory account.It produced 600 units during the year and sold 800 units.If Feldspar uses variable costing,________.

(Multiple Choice)

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(80)

Question 150

Louie's Music produces harmonicas that it sells for $12 each.The company computes a new monthly fixed manufacturing overhead allocation rate based on the planned number of harmonicas to be produced that month.Assume all costs and production levels are exactly as planned.The following data are from Louie's Music's first month in business: January 2019 Units produced and sold: 1200 Sales in units 1400 Production in units \ 4 Sariable manufacturing cost per harmonica \ 1 Total fixed manufacturing overhead \ 2,800 Total fixed selling and administrative costs \ 2,100 Requirements 1.Compute the product cost per harmonica produced under variable costing. 2.Prepare an income statement for January,2019

(Essay)

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(76)

Question 151

The high-low method requires the identification of the lowest and highest levels of total costs,not activity,over a period of time.

(True/False)

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Question 152

Variable cost per unit,within the relevant range,will ________.

(Multiple Choice)

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Question 153

Vintage Weaponry is owned and operated by a craftsman who makes replicas of historic firearms for museums,sportsmen,and collectors.He is currently producing 40 flintlock muskets per month.Data are as follows: Sales price per unit \ 800 Variable cost per unit 470 Fixed costs per month 10,230 If Vintage expects to sell 60 units per month,how much is his margin of safety expressed in sales revenue?

(Multiple Choice)

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(69)

Question 154

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

(True/False)

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Question 155

Waterproof Roofing Company has provided the following information: Sales revenue \ 779,000 Variable costs 506,000 Fixed costs 216,000 Which of the following statements is TRUE,if the sales volume increases by 10%?

(Multiple Choice)

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(79)

Question 156

McMillan,Inc.has the following cost data: Direct materials \ 38 per unit Direct labor 52 per unit Variable manufacturing overhead 15 per unit Fixed manufacturing overhead 10,000 per year Calculate the unit product cost using absorption costing when production is 200 units,400 units,and 800 units.

(Essay)

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Question 157

Fixed costs divided by the contribution margin ratio equals the breakeven point in sales dollars.

(True/False)

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Question 158

Delectable Foods produces a gourmet condiment that sells for $20 per unit.Variable cost is $8 per unit,and fixed costs are $5000 per month.If Delectable expects to sell 1500 units,compute the margin of safety in dollars.(Round any intermediate calculations to the nearest whole unit,and your final answer to the nearest dollar.)

(Multiple Choice)

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Question 159

Which of the following statements is TRUE of absorption costing?

(Multiple Choice)

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Question 160

Lilypad Hot Tubs,Inc.reports the following information for August: Sales Revenue \ 650,000 Variable Costs 270,000 Fixed Costs 73,000 Calculate the operating income for August using variable costing.

Which of the following appears as a line item in a contribution margin income statement?

An increase in sales price per unit decreases the contribution margin per unit.

Because contribution margin is based on sales price and variable costs,the contribution margin ratio can be calculated using either the total amounts or the unit amounts.

The relevant production range for Challenger Trailers,Inc.is between 130,000 units and 180,000 units per month.If the company produces beyond 180,000 units per month,________.

Feldspar,Inc.started the year with 200 units in the Finished Goods Inventory account.It produced 600 units during the year and sold 800 units.If Feldspar uses variable costing,________.

The high-low method requires the identification of the lowest and highest levels of total costs,not activity,over a period of time.

Variable cost per unit,within the relevant range,will ________.

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

Waterproof Roofing Company has provided the following information: Sales revenue \ 779,000 Variable costs 506,000 Fixed costs 216,000 Which of the following statements is TRUE,if the sales volume increases by 10%?

McMillan,Inc.has the following cost data: Direct materials \ 38 per unit Direct labor 52 per unit Variable manufacturing overhead 15 per unit Fixed manufacturing overhead 10,000 per year Calculate the unit product cost using absorption costing when production is 200 units,400 units,and 800 units.

Fixed costs divided by the contribution margin ratio equals the breakeven point in sales dollars.

Which of the following statements is TRUE of absorption costing?

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The Adjusting Process

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Introduction to Managerial Accounting

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