Exam 4: Cost Management Systems

The following information refers to the Cowan Company's past year of operations. *Common overhead totals $50,000 and is divided equally between the two products. **Common fixed selling totals $60,000 and is divided equally between the two products. Budgeted fixed overhead for the year of $180,000 equalled actual fixed overhead. Fixed overhead is assigned to products using a plant-wide rate based on expected direct labour hours, which were 150,000. The company had 5,000 of Product B in inventory at the beginning of the year. These units had the same unit cost as the units produced during the year. -Variable costing net income for the year is

Radlin Inc. has just completed its first year of operations. The unit costs on a normal costing basis are as follows: __________________________________________________________________ Actual fixed overhead was $170,000 for the year and actual variable overhead was $72,000. Budgeted fixed overhead was $180,000 and the company used an expected activity level of 40,000 direct labour hours to compute the predetermined overhead rates. Any overhead variances are closed to Cost of Goods Sold. a. Compute the unit cost under: (i) absorption costing (ii) variable costing b. Prepare an absorption-costing income statement. c. Prepare a variable-costing income statement. d. Reconcile the difference between the two income statements.

Which of the following statements is FALSE?

A company has the following information: -The fixed-overhead rate is determined by dividing the budgeted fixed manufacturing overhead by

Schultz Company reported the following information about the production and sales of its only product: -The contribution margin under variable costing would be

A company has the following information: -The ending inventory under variable costing would be

DeJager Company reported the following information about the production and sales of its only product: -The cost of producing one unit of product using variable costing would be

The cost of goods purchased line on the income statement of a retailer is the equivalent to which line on a manufacturer's income statement?

DeJager Company reported the following information about the production and sales of its only product: -The cost of goods sold under absorption costing would be

DeJager Company reported the following information about the production and sales of its only product: -The operating income (loss) under variable costing would be

Indicate whether each of the following costs is an Inventoriable cost (I) or a Period cost (P):

Schultz Company reported the following information about the production and sales of its only product: -The cost of goods sold under absorption costing would be

Which of the following terms appears on an income statement prepared using the contribution approach but NOT on an income statement using absorption costing?

When using the contribution approach to costing,

Lentz Manufacturers, a manufacturer of wood doors, has prepared the following list of accounts: There were no beginning or ending inventories. Required: Calculate the following: a. Direct materials used b. Direct labour c. Factory overhead d. Prime costs e. Conversion costs

Johnson Corp. prepared the following absorption-costing income statement for the year ended May 31, 20X1. Additional information follows: Selling and administrative expenses include $3 of variable cost per unit sold. There was no beginning inventory, and 17,500 units were produced. Variable manufacturing costs were $22 per unit. Actual fixed costs were equal to budgeted fixed costs. Required: Prepare a variable costing income statement for the same period.

How many inventory accounts does a manufacturer usually have?

In variable costing, revenue less all variable costs is

A company has the following information: -The net income under absorption costing would be

Schultz Company reported the following information about the production and sales of its only product: -The gross profit under absorption costing would be