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Exam 19: Variable Costing and Analysis

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Question 101

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Hayes Inc.provided the following information for the current year: -What is the unit product cost for the year using absorption costing?

A) $98
B) $66
C) $74
D) $96
E) $95

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Question 102

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________ is a costing method that includes all manufacturing costs in unit product costs.

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Question 103

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Chilly Chips,Inc.,a producer of ice cream,began operations this year.During this year,the company produced 160,000 cartons of ice cream and sold 145,000.At year-end,the company reported the following income statement using absorption costing: Production costs per carton total $3.50,which consists of $2.30 in variable production costs and $1.20 in fixed production costs (based on the 160,000 units produced).Sixty percent of total selling and administrative expenses are variable.Compute net income under variable costing.

________ is equal to Sales minus Variable manufacturing costs.

During its first year of operations,the McCormick Company incurred the following manufacturing costs: Direct materials,$5 per unit,Direct labor,$3 per unit,Variable overhead,$4 per unit,and Fixed overhead,$250,000.The company produced 25,000 units,and sold 20,000 units,leaving 5,000 units in inventory at year-end.What is the value of ending inventory under variable costing?

Many companies link manager bonuses to income computed under absorption costing because this is how income is reported to shareholders.

Given Advanced Company's data,compute cost per unit of finished goods under variable costing.

A company reports the following information for its first year of operations: If the company's cost per unit of finished goods using absorption costing is $27,how many units were produced?

What is Red and White's net income under absorption costing if 980 units are sold and selling and administrative expenses are $12,000?

Using absorption costing,which of the following manufacturing costs are assigned to products?

Identify the treatment of each of the following costs under variable costing and absorption costing:

Cost information from both absorption costing and variable costing can aid managers in pricing.

Sea Company reports the following information regarding its production costs: Compute the product cost per unit under absorption costing.

Magenta Inc.reports the following information for the current year,which is its first year of operations: If the company's cost per unit of finished goods using absorption costing is $39.75,what is total variable overhead?

What costs are treated as product costs under the absorption costing method?

Income under absorption costing will always be different than income under variable costing.

Blackbird,Incorporated reports the following information regarding its production cost: a.Compute production cost per unit under variable costing. b.Compute production cost per unit under absorption costing.

Triton Industries reports the following information regarding its production cost: a.Compute product cost per unit under variable costing. b.Compute product cost per unit under absorption costing.

Absorption costing is usually used for internal management purposes,and variable costing is usually used for external reporting purposes.

Under variable costing,the product unit cost consists of ________,direct materials,and variable overhead.