Exam 8: Variable Costing: a Tool for Management

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.

What was the amount of fixed overhead released for the month under absorption costing? Refer To: 08-04

What factor is the cause of the difference between operating income computed using absorption costing and operating income computed using variable costing?

What is the operating income for the month under absorption costing?

Which of the following are considered to be product costs under variable costing?

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)?

When the number of units in work-in-process and finished goods inventories increase,absorption costing operating income will typically be greater than variable costing operating income.

During the most recent year,Evans Company had operating income of $90,000 using absorption costing and $84,000 using variable costing.The fixed manufacturing overhead application rate was $6 per unit.There were no beginning inventories.If 22,000 units were produced last year,what were the sales in units for last year?

What was the total period cost for the month under the variable costing approach?

Absorption costing treats all manufacturing costs as product costs.

Under variable costing,which of the following costs are treated as period costs?

During the last year,Moore Company's total variable production costs were $10,000,and its total fixed manufacturing overhead costs were $6,800.The company produced 5,000 units during the year and sold 4,600 units.There were no units in the beginning inventory.Which of the following statements is true?

What is the unit product cost for the month under absorption costing?

Under variable costing,what was the total amount of fixed manufacturing cost in the ending inventory?

What was the total gross margin for the month?