Exam 12: Super-Variable Costing

Slezak Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 35,000 units and sold 31,000 units. The company's only product is sold for $264 per unit. Required: a. Assume the company uses super-variable costing. Compute the unit product cost for the year and prepare an income statement for the year. b. Assume that the company uses an absorption costing system that assigns $28 of direct labor cost and $68 of fixed manufacturing overhead to each unit that is produced. Compute the unit product cost for the year and prepare an income statement for the year.

Capello Corporation manufactures and sells one product. In the company's first year of operations, the variable cost consisted solely of direct materials of $93 per unit. The annual fixed costs were $675,000 of direct labor cost, $1,701,000 of fixed manufacturing overhead expense, and $780,000 of fixed selling and administrative expense. The company does not have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 27,000 units and sold 20,000 units. The company's only product is sold for $258 per unit. Required: a. Assume the company uses super-variable costing. Compute the unit product cost for the year and prepare an income statement for the year. b. Assume that the company uses an absorption costing system that assigns $25 of direct labor cost and $63 of fixed manufacturing overhead to each unit that is produced. Compute the unit product cost for the year and prepare an income statement for the year.

The net operating income for the year under super-variable costing is:

The company is considering using either super-variable costing or a variable costing system that assigns $25 of direct labor cost to each unit that is produced. Which of the following statements is true regarding the net operating income in the first year?

The super-variable costing net operating income period can be computed by multiplying the number of units sold by the contribution margin per unit and then subtracting total fixed costs.

The unit product cost under super-variable costing is:

Assume that the company uses a variable costing system that assigns $22 of direct labor cost to each unit that is produced. The unit product cost under this costing system is:

The net operating income for the year under super-variable costing is:

The net operating income for the year under super-variable costing is: