Exam 20: Variable Costing for Management Analysis

If variable selling and administrative expenses totaled $124,000 for the year 80,000 units at $1.55 each) and the planned variable selling and administrative expenses totaled $136,500 78,000 units at $1.75 each), the effect of the quantity factor on the change in contribution margin is:

A business operated at 100% of capacity during its first month and incurred the following costs: If 1,500 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the variable costing balance sheet?

In which of the following types of firms would it be appropriate to prepare contribution margin reporting and analysis?

In evaluating the performance of salespersons, the salesperson with the highest level of sales should be evaluated as the best performer.

A business operated at 100% of capacity during its first month and incurred the following costs: If 1,000 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the absorption costing balance sheet?

It would be acceptable to have the selling price of a product just above the variable costs and expenses of making and selling it in:

On October 31, the end of the first month of operations, Morristown & Co. prepared the following income statement based on absorption costing: Morristown & Co. Absorption Costing Income Statement For Month Ended October 31, 20- If the fixed manufacturing costs were $42,900 and the variable selling and administrative expenses were $14,600, prepare an income statement using variable costing.

Fixed factory overhead costs are included as part of the cost of products manufactured under the absorption costing concept.

The amount of income under absorption costing will be more than the amount of income under variable costing when units manufactured:

For a period during which the quantity of inventory at the end was smaller than that at the beginning, income from operations reported under variable costing will be smaller than income from operations reported under absorption costing.

On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January. The following data summarized the results for January: a) Prepare an income statement using absorption costing. b) Prepare an income statement using variable costing.

The systematic examination of the differences between planned and actual contribution margin is

The level of inventory of a manufactured product has increased by 5,000 units during a period. The following data are also available: What would be the effect on income from operations if variable costing is used rather than absorption costing?

A business operated at 100% of capacity during its first month, with the following results: Operating expenses: -What is the amount of the income from operations that would be reported on the absorption costing income statement?

In contribution margin analysis, the unit price or unit cost factor is computed as the difference between the actual unit price or unit cost and the planned unit price or unit cost, multiplied by the actual quantity sold.

In contribution margin analysis, the unit price or unit cost factor is computed as:

Under absorption costing, the cost of finished goods includes only direct materials, direct labor, and variable factory overhead.

A business operated at 100% of capacity during its first month and incurred the following costs: If 1,600 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the variable costing balance sheet?

If variable manufacturing costs are $15 per unit and total fixed manufacturing costs are $200,000, what is the manufacturing cost per unit if: a) 20,000 units are manufactured and the company uses the variable costing concept? b) 25,000 units are manufactured and the company uses the variable costing concept? c) 20,000 units are manufactured and the company uses the absorption costing concept? d) 25,000 units are manufactured and the company used the absorption costing concept?

Ford's Expedition sport utility vehicle is its most profitable model. Therefore, Ford need not promote its Expedition model anymore.