Exam 8: Variable Costing: A Tool for Management

Chown Company, which has only one product, has provided the following data concerning its most recent month of operations: Selling price \ 110 Units in beginning inventory 0 Units produced 8,000 Units sold 7,800 Units in ending inventory 200 Variable costs per unit: Direct materials \ 22 Direct labour \ 31 Variable manufacturing overhead \ 3 Variable selling and administrative \ 4 Fixed costs: Fixed manufacturing overhead \ 248,000 Fixed selling and administrative \ 140,400 -What was the total contribution margin for the month under the variable costing approach?

Farron Company, which has only one product, has provided the following data concerning its most recent month of operations: Selling price \ 92 Units in beginning inventory 0 Units produced 8,700 Units sold 8,300 Units in ending inventory 400 Variable costs per unit: Direct materials \ 13 Direct labour \ 55 Variable manufacturing overhead \ 1 Variable selling and administrative \ 5 Fixed costs: Fixed manufacturing overhead \ 130,500 Fixed selling and administrative \ 8,300 -What was the amount of fixed overhead cost in ending inventory under absorption costing?

Aaker Company, which has only one product, has provided the following data concerning its most recent month of operations: Selling price \ 99 Units in beginning inventory 0 Units produced 6,300 Units sold 6,000 Units in ending inventory 300 Variable costs per unit: Direct materials \ 12 Direct labour \ 42 Variable manufacturing overhead \ 6 Variable selling and administrative \ 6 Fixed costs: Fixed manufacturing overhead \ 170,100 Fixed selling and administrative \ 24,000 -What is the total period cost for the month under the absorption costing approach?