Exam 19: Variable Costing and Performance Reporting

Toth,Inc.had net income of $950,000 based on variable costing.Beginning and ending inventories were 60,000 units and 56,000 units,respectively.Assume the fixed overhead cost per unit was $.85 for both the beginning and ending inventory.What is net income under absorption costing?

Assume that the following information is available for Coldwrap,Inc.: Light- Medium- Heavy- weight weight weight Down Down Down Comforter Comforter Comforter Sales \ 525,000 \ 262,500 \ 660,000 Variable expenses Variable production \ 105,000 \ 28,875 \ 135,000 Variable advertising \ 15,750 \ 5,250 \ 33,000 Variable shipping \ 18,000 \ 21,000 \ 42,000 Compute contribution margin ratio for each product line.

Reporting contribution margin by market segment is useful in assessing the profitability of each segment.

Planet Corporation sold 21,000 units of its product at a price of $250 per unit.Total variable cost per unit is $187,consisting of $104 in variable production cost and $83 in variable selling and administrative cost.Compute the manufacturing margin for the company under variable costing.

Reference: 19_05 Red and White Company reported the following monthly data: Units produced 2,000 units Sales price \ 25 per unit Direct materials \ 1 per unit Direct labor \ 2 per unit Variable overhead \ 3 per unit Fixed overhead \ 8,000 in total -What is Red and White's net income under absorption costing if 980 units are sold and operating expenses are $12,000?

Reference: 19_04 Cool Pools, a manufacturer of above ground pools, began operations on January 1 of the current year. During this time, the company produced 45,000 units and sold 44,000 units at a sales price of $60 per unit. Cost information for this year is shown in the following table: Production costs Direct materials \ 11.25 per unit Direct labor \ 3.20 per unit Variable overhead \ 315,000 in total Fixed overhead \ 39,600 in total Nonproduction costs Variable selling and administrative \ 2,000 in total Fixed selling and administrative \ 6,000 in total -Given the Cool Pools Company data,what is net income using absorption costing?

Given the following data,calculate the total product cost per unit under absorption costing. Direct labor \ 3.50 per unit Direct materials \ 1.25 per unit Overhead Total variable overhead \ 41,400 Total fixed overhead \ 150,000 Expected units to be produced 18,000 units

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

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 administrative expenses Net income 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.

If a company has excess capacity,increases in production level will increase variable production costs but not fixed production costs.

Assume a company sells a given product for $83 per unit.Variable selling costs are $20.75 per unit and variable production costs are $49.80 per unit.If the company breaks even when selling 300,000 units,what are total fixed costs?

Given the following data,total product cost per unit under variable costing is $7.05. Direct labor \ 3.50 per unit Direct materials \ 1.25 per unit Overhead Total variable overhead \ 41,400 Total fixed overhead \ 150,000 Expected units to be produced 18,000 units

Contribution margin ratio is the percent of each sales dollar used to cover variable costs.

Wind Fall,a manufacturer of leaf blowers,began operations this year.During this year,the company produced 10,000 leaf blowers and sold 8,500.At year-end the company reported the following income statement using absorption costing: Sales (8,500\times\ 45) \ 382,500 Cost of goods sold (8,500\times\ 20) Gross margin \ 212,500 Selling and administrative expenses Net income Production costs per leaf blower total $20,which consists of $16 in variable production costs and $4 in fixed production costs (based on the 10,000 units produced).Fifteen percent of total selling and administrative expenses are variable. Compute net income under variable costing.

Branwin Corporation sold 7,200 units of its product at a price of $35.60 per unit.Total variable cost per unit is $17.55,consisting of $10.50 in variable production cost and $7.05 in variable selling and administrative cost.Compute contribution margin for the company.

Contribution margin divided by sales equals contribution margin ratio.

Shore Company reports the following information regarding its production cost: Units produced 28,000 units Direct labor \ 23 per unit Direct materials \ 24 per unit Variable overhead \ 280,000 total Fixed overhead \ 94,920 total Compute production cost per unit under variable costing.

A traditional product costing approach is referred to as ______________.

A company is currently operating at 60% capacity producing 10,000 units.Cost information relating to this current production is shown in the following table: Per Unit Sales price \ 21 Direct material \ 6 Direct labor \ 4.12 Variable overhead \ 2.23 Fixed overhead \ 0.80 The company has been approached by a customer with a request for a special order for 5,000 units.What is the minimum per unit sales price that management would accept for this order if the company wishes to increase current profits?

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 \ 1.50 per unit Direct materials \ 1.50 per unit Overhead Total variable overhead \ 900,000 Total fixed overhead \ 1,200,000 Expected units to be produced 3,000 units