Ch6 Practice Leader Answeronly
1.
A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:
What is the absorption costing unit product cost for the month?
A.
$96 per unit
B.
$83 per unit
C.
$87 per unit
D.
$100 per unit
Solution: A
F-MOH / Units Produced = 94,900 / 7,300 = 13
29 + 49 + 5 + 13 = 96
2.
A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:
What is the total period cost for the month under variable costing?
A.
$124,200
B.
$123,200
C.
$168,200
D.
$45,000
Solution: C
45,000 + 79,200 + (10 * 4,400 = 44,000) = 168,200
3.
Swifton Corporation produces a single product. Last year, the company had net operating income of $40,000 using variable costing. Beginning and ending inventories were 22,000 and 27,000 units, respectively. If the fixed manufacturing overhead cost was $3 per unit both last year and this year, what was the income using absorption costing?
A.
$15,000
B.
$25,000
C.
$40,000
D.
$55,000
Solution: D
Produce > Sold -> Absorption NI > Variable NI
40,000 + 3 * (27,000 – 22,000 = 5,000) = 15,000 = 55,000
4.
Gough Corporation has two divisions: Domestic and Foreign. Data from the most recent month appear below:
The break-even in sales dollars for the company as a whole is closest to:
A.
$609,794
B.
$502,579
C.
$107,216
D.
$436,424
Solution: A
WORK BACKWARDS
BE Point (Use Total Company)
FC / CM Ratio = 408,480 / ((447,470 / 668,000) = 67%) = 609,794
5.
Warburton Corporation has two divisions: Alpha and Beta. Data from the most recent month appear below:
The company's common fixed expenses total $85,690. The break-even in sales dollars for Alpha Division is closest to:
A.
$273,623
B.
$162,338
C.
$420,116
D.
$217,117
Solution: B
170,940 / 222,000 = 77%
DC / CM Ratio = 125,000 / 77% = 162,338
A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:
What is the absorption costing unit product cost for the month?
A.
$96 per unit
B.
$83 per unit
C.
$87 per unit
D.
$100 per unit
Solution: A
F-MOH / Units Produced = 94,900 / 7,300 = 13
29 + 49 + 5 + 13 = 96
2.
A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:
What is the total period cost for the month under variable costing?
A.
$124,200
B.
$123,200
C.
$168,200
D.
$45,000
Solution: C
45,000 + 79,200 + (10 * 4,400 = 44,000) = 168,200
3.
Swifton Corporation produces a single product. Last year, the company had net operating income of $40,000 using variable costing. Beginning and ending inventories were 22,000 and 27,000 units, respectively. If the fixed manufacturing overhead cost was $3 per unit both last year and this year, what was the income using absorption costing?
A.
$15,000
B.
$25,000
C.
$40,000
D.
$55,000
Solution: D
Produce > Sold -> Absorption NI > Variable NI
40,000 + 3 * (27,000 – 22,000 = 5,000) = 15,000 = 55,000
4.
Gough Corporation has two divisions: Domestic and Foreign. Data from the most recent month appear below:
The break-even in sales dollars for the company as a whole is closest to:
A.
$609,794
B.
$502,579
C.
$107,216
D.
$436,424
Solution: A
WORK BACKWARDS
BE Point (Use Total Company)
FC / CM Ratio = 408,480 / ((447,470 / 668,000) = 67%) = 609,794
5.
Warburton Corporation has two divisions: Alpha and Beta. Data from the most recent month appear below:
The company's common fixed expenses total $85,690. The break-even in sales dollars for Alpha Division is closest to:
A.
$273,623
B.
$162,338
C.
$420,116
D.
$217,117
Solution: B
170,940 / 222,000 = 77%
DC / CM Ratio = 125,000 / 77% = 162,338