Exam 8: Absorption and Variable Costing,and Inventory Management

Figure 8-10. Nauman Company has the following information pertaining to its two divisions for 2011: Common expenses are $24,000 for 2011. Refer to Figure 8-10.What is the income for Nauman Company?

Inventory taxes,obsolescence,and insurance are examples of _______________.

When a company needs to place a new order for goods,they have reached the ___________.

If the number of units produced in a period is larger than the number of units sold in a period,absorption costing income will be higher than variable costing income.

Variable costing is

Figure 8-8. Steele Corporation has the following information for January,February,and March 2011: Production costs per unit (based on 10,000 units)are as follows: There were no beginning inventories for January 2011,and all units were sold for $50.Costs are stable over the three months. Refer to Figure 8-8.What is the March ending inventory for Steele Corporation using the variable costing method?

Figure 8-11. Tyler Company has the following information pertaining to its two product lines for 2011: Common expenses are $105,000 for 2011. Refer to Figure 8-11.What is the segment margin for Product B?

Figure 8-8. Steele Corporation has the following information for January,February,and March 2011: Production costs per unit (based on 10,000 units)are as follows: There were no beginning inventories for January 2011,and all units were sold for $50.Costs are stable over the three months. Refer to Figure 8-8.What is the February ending inventory for Steele Corporation using the absorption costing method?

When using _______________ a company only assigns variable manufacturing costs to the product.

Figure 8-10. Nauman Company has the following information pertaining to its two divisions for 2011: Common expenses are $24,000 for 2011. Refer to Figure 8-10.What is the segment margin for Division Y?

Figure 8-1. Last year,Fabre Company produced 20,000 units and sold 18,000 units at a price of $12.Costs for last year were as follows: Fixed factory overhead is applied based on expected production.Last year,Fabre expected to produce 20,000 units. Refer to Figure 8-1.Assuming that beginning inventory was zero,what is the value of ending inventory under absorption costing?

Figure 8-3. Martin Company uses 625 units of a part each year.The cost of placing one order is $8; the cost of carrying one unit in inventory for a year is $4. Refer to Figure 8-3.Martin has decided to begin ordering 40 units at a time.What is the average annual carrying cost of Martin's new policy?

What is the difference between absorption-costing income and variable-costing income?

Variable costing treats fixed factory overhead as a ______________.

_______________ assigns all manufacturing costs to the product.

The variable costing income statement for Jackson Company for 2011 is as follows: Selected data for 2011 concerning the operations of the company are as follows: Required: Prepare an absorption costing income statement for 2011.

The _______________________ is the number of units in the optimal size order quantity.

Which of the following statements is true?

The inventory cost that can include processing costs,cost of insurance for shipping,and unloading is called

Mario Co.produces three products: LMC,DMC,KPC.For the coming year they expect to produce 160,000 units.Of these,65,000 will be LMC,40,000 will be DMC and 55,000 will be KPC.The following information was provided for the coming year: Common fixed overhead is $984,000 and fixed selling and administrative expenses for Mario Co.is $881,000 per year. Required: A.Calculate the unit variable cost under variable costing. B.Calculate the unit variable product cost. C.Prepare a segmented variable-costing income statement for next year. D.Should Mario Co.keep all product lines?