Exam 6: Variable Costing and Performance Reporting

Given the following data, total product cost per unit under absorption costing is $11.40. Direct labor \ 5 per unit Direct rmaterials \ 6 per unit Overhead Total variable overhead \ 32,800 Total fixed overhead \ 164,000 Expected urits to be produced

Given Advanced Company's data, compute cost of finished goods in inventory under absorption costing.

Assume a company sells a given product for $12 per unit.How many units must be sold to break even if variable selling costs are $0.50 per unit, variable production costs are $3.50 per unit, and total fixed costs are $4,500,000?

________________________ is the exact point where revenues equal expenses.

During a given year if a company produces and sells the same number of units, then beginning inventory units equal ending inventory units.

Assume a company sells a given product for $90 per unit.How many units must be sold to break even if variable selling costs are $2 per unit, variable production costs are $31 per unit, and total fixed costs are $1,799,946?

A company reports the following information regarding its production cost: Units produced 22,000 units Direct labor \ 31 per unit Direct materials \ 27 per unit Variable overhead ? in total Fixed overhead \ 2,750,000 in total Required: Perform the following independent calculations. a.Compute total variable overhead cost if the production cost per unit under variable costing is $240. b.Compute total variable overhead cost if the production cost per unit under absorption costing is $240.

A company reports the following information regarding its production cost: Units produced 14,000 units Direct labor \ 13 per unit Direct materials \ 3 per unit Variable overhead ? in total Fixed overhead \ 56,000 in total Required: Perform the following independent calculations. a.Compute total variable overhead cost if the production cost per unit under variable costing is $73. b.Compute total variable overhead cost if the production cost per unit under absorption costing is $73.

During a given year, if a company produces more units than it sells, then ending inventory units will be less than beginning inventory units.

Managers should accept special orders provided the special order price exceeds full cost.

What costs are treated as product costs under the variable costing method?

The traditional costing approach assigns all manufacturing costs to products.

Assume a company sells a given product for $33.28 per unit.How many units must the company sell to break-even if variable selling costs are $1.40 per unit, variable production costs are $23.56 per unit, and total fixed costs are $2,080,000?

Given the following data, total product cost per unit under absorption costing will be $400 greater than total product cost per unit under variable costing. Direct labor Direct rmaterials \ 1.50 unit Overhead Total variable overhead \ 900,000 Total fixed overhead \ 1,200,000 Expected urits to be produced units

Anchovy, Inc., a producer of frozen pizzas, began operations this year.During this year, the company produced 16,000 cases of pizza and sold 15,000.At year-end, the company reported the following income statement using absorption costing: Sales (15,000\times\ 48) \ 720,000 Cost of goods sold (15,000\times\ 19) Gross margin \ 435,000 Selling and adrninistrative expenses Net incorne Production costs per case total $19, which consists of $15.50 in variable production costs and $3.50 in fixed production costs (based on the 16,000 units produced).Eight percent of total selling and administrative expenses are variable.Compute net income under variable costing.

Vision Tester, Inc., a manufacturer of optical glass, began operations on February 1 of the current year.During this time, the company produced 900,000 units and sold 800,000 units at a sales price of $12 per unit.Cost information for this year is shown in the following table: Production costs Direct materials \ 80 per unit Direct labor \ 70 per unit Variable overhead \ 500,000 in total Fixed overhead \ 450,000 in total Jon-production costs Variable selling and administrative \ 30,000 in total Fixed selling and administrative \ 490,000 in total Given this information, which of the following is true?

To convert variable costing income to absorption costing income, management will need to change the way fixed overhead costs are treated.

Which of the following statements is true regarding variable costing?

Variable costing is the only acceptable basis for both external reporting and tax reporting.

A variable costing income statement focuses attention on the relationship between costs and sales that is not evident from the absorption costing format.