Exam 6: Variable Costing: a Tool for Management

Dewiel Corporation manufactures a variety of products.The following data pertain to the company's operations over the last two years: -What was the absorption costing net operating income last year?

Which of the following costs at a manufacturing company would be treated as a product cost under the absorption costing method?

Dearman Company,which has only one product,has provided the following data concerning its most recent month of operations: -What is the total period cost for the month under the absorption costing approach?

Ross Company produces a single product.The company has direct materials costs of $8 per unit,direct labor costs of $6 per unit,and manufacturing overhead of $10 per unit.Sixty percent of the manufacturing overhead is for fixed costs.In addition,variable selling and administrative costs are $2 per unit,and fixed selling and administrative costs are $3 per unit at the current activity level.Assume that direct labor is a variable cost. -Under variable costing,the unit product cost is:

If production exceeds sales for the period,variable costing net operating income will typically be greater than absorption costing net operating income.

Botwinick Corporation manufactures a variety of products.The following data pertain to the company's operations over the last two years: -What was the absorption costing net operating income this year?

Hackney Company,which has only one product,has provided the following data concerning its most recent month of operations: -What is the net operating income for the month under variable costing?

Pachur Company,which has only one product,has provided the following data concerning its most recent month of operations: The company produces the same number of units every month,although the sales in units vary from month to month.The company's variable costs per unit and total fixed costs have been constant from month to month. Required: a.What is the unit product cost for the month under variable costing? b.Prepare a contribution format income statement for the month using variable costing. c.Without preparing an income statement,determine the absorption costing net operating income for the month.(Hint: Use the reconciliation method. )

Charrd Corporation manufactures a gas operated barbecue grill.The following information relates to Charrd's operations for last year: What is Charrd's variable costing unit product cost?

Mascioli Corporation produces a single product and has the following cost structure: Required: Compute the unit product cost under variable costing.Show your work!

Soffer Corporation manufactures a variety of products.Last year,variable costing net operating income was $72,000.The fixed manufacturing overhead costs released from inventory under absorption costing amounted to $24,000. Required: Determine the absorption costing net operating income last year.Show your work!

During its first year of operations,Holt Manufacturing Company incurred the following costs to produce 200,000 units of its only product: Holt also incurred the following costs in the sale of 180,000 units of product during its first year: Assume that direct labor is a variable cost. -What would be the cost per unit of Holt's finished goods inventory at the end of the first year of operations under the variable costing method?

Last year,Jaquet Corporation's variable costing net operating income was $58,000.The fixed manufacturing overhead costs deferred in inventory under absorption costing amounted to $9,000. Required: Determine the absorption costing net operating income last year.Show your work!

Faxon Company,which has only one product,has provided the following data concerning its most recent month of operations: -What is the unit product cost for the month under variable costing?

Caparros Corporation manufactures a variety of products.Variable costing net operating income was $62,800 last year and was $74,900 this year.Last year,ending inventory decreased by 3,300 units.This year,ending inventory increased by 1,900 units.Fixed manufacturing overhead cost is $7 per unit. -What was the absorption costing net operating income this year?

Mcferrin Corporation manufactures a variety of products.Last year,the company's variable costing net operating income was $53,200.Fixed manufacturing overhead costs released from inventory under absorption costing amounted to $32,900.What was the absorption costing net operating income last year?

Yoshihara Corporation produces a single product and has the following cost structure: The absorption costing unit product cost is:

Data concerning Sonderegger Company's operations last year appear below: Required: a.Prepare an income statement for the year using absorption costing. b.Prepare a contribution format income statement for the year using variable costing. c.Prepare a report reconciling the difference in net operating income between absorption and variable costing for the year.

Which of the following statements is true for a company that uses variable costing?

Which of the following statements is true for a company that uses variable costing?