Exam 8: Variable Costing: A Tool for Management

Since variable costing emphasizes costs by behaviour,it works well with cost-volume-profit analysis.

Aaker Company, which has only one product, has provided the following data concerning its most recent month of operations: -What is the operating income (loss)for the month under variable costing?

Last year, Walsh Company manufactured 25,000 units and sold 22,000 units. Production costs were as follows: Total sales were $440,000, total variable selling and administrative expenses were $110,000, and total fixed selling and administrative expenses were $45,000. There was no beginning inventory. Assume that direct labour is a variable cost. -Under absorption costing,what was the gross margin?

Hatfield Company, which has only one product, has provided the following data concerning its most recent month of operations: -What was the total period cost for the month under the variable costing approach?

Gabbert Company, which has only one product, has provided the following data concerning its most recent month of operations: -What was the total period cost for the month under the variable costing approach?

Last year,fixed manufacturing overhead costs were $30,000,variable production costs were $48,000,fixed selling and administration costs were $20,000,and variable selling administrative expenses were $9,600.There was no beginning inventory.During the year,3,000 units were produced and 2,400 units were sold at a price of $40 per unit.Under variable costing,what would be the operating income (loss)?

The following data pertain to one month's operations of Whitney, Inc.: -What was the carrying value on the balance sheet of the ending finished goods inventory under absorption costing?

Fahey Company manufactures a single product that it sells for $25 per unit. The company has the following cost structure: There were no units in beginning inventory. During the year, 18,000 units were produced and 15,000 units were sold. -What was the company's operating income for the year under variable costing?

At the end of last year,Lee Company had 30,000 units in its ending inventory.Every year,Lee Company's variable production costs are $10 per unit,and its fixed manufacturing overhead costs are $5 per unit.The company's operating income for the year was $12,000 higher under variable costing than under absorption costing.Given these facts,what must have been the number of units of product in inventory at the beginning of the year?

Aaker Company, which has only one product, has provided the following data concerning its most recent month of operations: -What is the operating income (loss)for the month under absorption costing?

Last year, Harris Company manufactured 17,000 units and sold 13,000 units. Production costs for the year were as follows: Sales were $780,000 for the year, variable selling and administrative expenses were $88,400, and fixed selling and administrative expenses were $170,000. There was no beginning inventory. Assume that direct labour is a variable cost. -What was the contribution margin per unit?

Indiana Corporation produces a single product that it sells for $9 per unit.During the first year of operations,100,000 units were produced and 90,000 units were sold.Manufacturing costs and selling and administrative expenses for the year were as follows: What was Indiana Corporation's operating income for the year using variable costing?

Hatfield Company, which has only one product, has provided the following data concerning its most recent month of operations: -What was the total contribution margin for the month under the variable costing approach?

Jarvix Company, which has only one product, has provided the following data concerning its most recent month of operations: -What was the amount of fixed manufacturing overhead deferred under absorption costing?

Which of the following costs/expenses is included in product costs under both absorption costing and variable costing?

During the past year, Carr Company manufactured 25,000 units and sold 20,000 units. Production costs for the year were as follows: Total sales were $850,000, total variable selling expenses were $110,000, and total fixed selling and administrative expenses were $170,000. There were no units in beginning inventory. Assume that direct labour is a variable cost. -What was the contribution margin per unit?

Erie Company manufactures a single product. Assume the following data for the year just completed: There were no units in inventory at the beginning of the year. During the year, 30,000 units were produced and 25,000 units were sold. Each unit sells for $35. -What was the company's operating income under variable costing?

Harper Company,which has only one product,has provided the following data concerning its most recent month of operations: The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month. Required: a. Compute the total Contribution Margin. b. Compute the Operating Income under Variable Costing. c. Prepare a reconciliation from your Variable Costing Operating Income to compute Operating Income under absorption costing.

Hatfield Company, which has only one product, has provided the following data concerning its most recent month of operations: -What was the unit product cost for the month under variable costing?

Last year,Stephen Company had 20,000 units in its ending inventory.During the year,Stephen Company's variable production costs were $12 per unit.The fixed manufacturing overhead cost was $8 per unit in the beginning inventory.The company's operating income for the year was $9,600 higher under variable costing than it was under absorption costing.Given these facts,what must have been the number of units of product in the beginning inventory last year?