Exam 19: Variable Costing and Performance Reporting

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 in total Fixed overhead \ 94,920 in total Compute production cost per unit under absorption costing.

A company reports the following information for its first year of operations. Units produced this year ? units Units sold this year 1,500 units Direct materials \ 9 per unit Direct labor \ 5 per unit Variable overhead \ 7 per unit Fixed overhead \ 24,000 in total If the company's cost per unit of finished goods using absorption costing is $27, how many units were produced?

Given the following data, total product cost per unit under absorption costing is $9.14. Direct labor \ 0.72 per unit Direct materials \ 0.80 per unit Overhead Total variable overhead \ 202,500 Total fixed overhead \ 140,400 Expected units to be produced 45,000 units

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 per unit Fixed overhead \ 94,920 in total Compute production cost per unit under variable costing.

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

How does contribution margin differ from gross margin?

Assume that the following information was available for Daylight Enterprises, Inc. Which of the following statements is(are) true with regard to contribution margin ratio? Ceiling lights Tabletop lights Stand-alone lights Sales \ 350,000 \ 175,000 \ 440,000 Variable expenses Variable production \ 70,000 \ 19,250 \ 90,000 Variable advertising \ 10,500 \ 3,500 \ 22,000 Variable shipping \ 12,000 \ 14,000 \ 28,000

Which of the following statements is true?

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.

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. 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.

Which of the following is not a product cost?

How will net income under variable costing compare to net income under absorption costing in the following three situations? Explain briefly the cause of any differences. (a) Units produced equal units sold (b) Units produced exceed units sold (c) Units produced are less than units sold

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.

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

Gage Company reports the following information for its first year of operations. Units produced this year 7,000 units Units sold this year 6,500 units Direct materials \ 22 per unit Direct labor \ 30 per unit Variable overhead ? in total Fixed overhead \ 56,000 in total If the company's cost per unit of finished goods using variable costing is $63, what is total variable overhead?

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

Assume a company sells a given product for $18 per unit. Variable selling costs are $0.70 per unit and variable production costs are $5.30 per unit. If the company breaks even when selling 4,000,000 units, what are total fixed costs?

Under absorption costing, a company had the following unit costs when 8,000 units were produced. Compute the total production cost per unit under absorption costing if 30,000 units had been produced.

A per unit cost that is constant at all production levels is a ________________________ cost per unit.

A company reports the following information regarding its production cost. Required: Perform the following independent calculations. 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 (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.