Lilypad Hot Tubs, Inc. reports the following information for August: \[\begin{array} { | l | r | } \hline \text { Sales Revenue } & \$ 640,000 \\ \hline \text { Variable Costs } & 210,000 \\ \hline \text { Fixed Costs } & 73,000 \\ \hline \end{array}\] Calculate the operating income for August using variable costing.

A) $430,000 B) $567,000 C) $357,000 D) $640,000 A) $430,000 B) $567,000 C) $357,000 D) $640,000

Morwenna, Inc. reports the following information for August: \[\begin{array} { | l | r | } \hline \text { Sales Revenue } & \$ 900,000 \\ \hline \text { Variable Cost of Goods Sold } & 120,000 \\ \hline \text { Fixed Cost of Goods Sold } & 60,000 \\ \hline \text { Variable Selling and Administrative Costs } & 150,000 \\ \hline \text { Fixed Selling and Administrative Costs } & 50,000 \\ \hline \end{array}\] Calculate the operating income for August using absorption costing.

A) $520,000 B) $270,000 C) $1,100,000 D) $380,000 A) $520,000 B) $270,000 C) $1,100,000 D) $380,000

Windspring Spas, Inc. reports the following information for August: \[\begin{array} { | l | r | } \hline \text { Sales Revenue } & \$ 590,000 \\ \hline \text { Variable Costs } & 160,000 \\ \hline \text { Fixed Costs } & 50,000 \\ \hline \end{array}\] Calculate the contribution margin for August.

A) $110,000 B) $430,000 C) $380,000 D) $540,000 A) $110,000 B) $430,000 C) $380,000 D) $540,000

Exam 21: Variable Costing

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Lilypad Hot Tubs, Inc. reports the following information for August: Sales Revenue \ 640,000 Variable Costs 210,000 Fixed Costs 73,000 Calculate the operating income for August using variable costing.

(Multiple Choice)

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Question 141

Morwenna, Inc. reports the following information for August: Sales Revenue \ 900,000 Variable Cost of Goods Sold 120,000 Fixed Cost of Goods Sold 60,000 Variable Selling and Administrative Costs 150,000 Fixed Selling and Administrative Costs 50,000 Calculate the operating income for August using absorption costing.

(Multiple Choice)

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Question 142

The contribution margin for service companies is calculated by subtracting fixed costs from service revenue.

(True/False)

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Question 143

Windspring Spas, Inc. reports the following information for August: Sales Revenue \ 590,000 Variable Costs 160,000 Fixed Costs 50,000 Calculate the contribution margin for August.

(Multiple Choice)

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Question 144

Absorption costing is used to analyze contribution margin.

(True/False)

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Question 145

Variable costing considers direct materials, direct labor, variable manufacturing overhead, and fixed manufacturing overhead as product costs.

(True/False)

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Question 146

Which of the following is considered a period cost under variable costing but not under absorption costing?

(Multiple Choice)

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Question 147

When there is no beginning Finished Goods Inventory and all the goods that are produced are sold, the operating income ________.

(Multiple Choice)

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Question 148

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Lilypad Hot Tubs, Inc. reports the following information for August: Sales Revenue \ 640,000 Variable Costs 210,000 Fixed Costs 73,000 Calculate the operating income for August using variable costing.

The contribution margin for service companies is calculated by subtracting fixed costs from service revenue.

Windspring Spas, Inc. reports the following information for August: Sales Revenue \ 590,000 Variable Costs 160,000 Fixed Costs 50,000 Calculate the contribution margin for August.

Absorption costing is used to analyze contribution margin.

Variable costing considers direct materials, direct labor, variable manufacturing overhead, and fixed manufacturing overhead as product costs.

Which of the following is considered a period cost under variable costing but not under absorption costing?

When there is no beginning Finished Goods Inventory and all the goods that are produced are sold, the operating income ________.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Internal Control and Cash

Receivables

Plant Assets, Natural Resources, and Intangibles

Investments

Current Liabilities and Payroll

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost Management Systems: Activity-Based Just-In-Time

Cost Volume Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Responsibility Accounting and Performance Evaluation

Short-Term Business Decisions

Capital Investment Decisions

Understanding Accounting Information Systems and their Components

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