Question 1

On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January. The following data summarized the results for January:

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The answer of On January 1 of the current year,...

Question 2

Presented below are the major categories or captions that would appear on an income statement prepared in the variable costing format:
Contribution margin
Fixed costs
Income from operations
Manufacturing margin
Sales
Variable cost of goods sold
Variable selling and administrative expenses

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The answer of Presented below are the major categories or...

Question 3

Based upon the following data taken from the records of Bruce Inc., prepare a contribution margin analysis report for the year ended December 31, 2012.

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The answer of Based upon the following data taken from...

Question 4

The Excelsior Company has three salespersons. Average sales price per unit sold, average variable manufacturing costs per unit, and number of units sold for each salesperson is shown below.
Commissions are according to the following schedule:

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The answer of The Excelsior Company has three salespersons. Average...

Question 5

The actual price for a product was $50 per unit, while the planned price was $44 per unit. The volume increased by 4,000 to 60,000 total units. Determine (a) the quantity factor and (b) the price factor for sales.

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The answer of The actual price for a product was...

Question 6

Variable costs are $80 per unit, and fixed costs are $40,000. Sales are estimated to be 4,000 units. (a) How much would absorption costing income from operations differ between a plan to produce 4,000 units and a plan to produce 5,000 units? (b) How much would variable costing income from operations differ between the two production plans?

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The answer of Variable costs are $80 per unit, and...

Question 7

If variable manufacturing costs are $15 per unit and total fixed manufacturing costs are $200,000, what is the manufacturing cost per unit if:
(a) 20,000 units are manufactured and the company uses the variable costing concept?
(b) 25,000 units are manufactured and the company uses the variable costing concept?
(c) 20,000 units are manufactured and the company uses the absorption costing concept?
(d) 25,000 units are manufactured and the company used the absorption costing concept?

Accepted Answer

The answer of If variable manufacturing costs are $15 per...

Question 8

The Excelsior Company has three salespersons. Average sales price per unit sold, average variable manufacturing costs per unit, and number of units sold for each salesperson is shown below.
Commissions are according to the following schedule:

Accepted Answer

The answer of The Excelsior Company has three salespersons. Average...

Question 9

On August 31, the end of the first year of operations, during which 18,000 units were manufactured and 13,500 units were sold, Olympic Inc. prepared the following income statement based on the variable costing concept:

Accepted Answer

The answer of On August 31, the end of the...

Question 10

The beginning inventory is 10,000 units. All of the units manufactured during the period and 8,000 units of the beginning inventory were sold. The beginning inventory fixed costs are $50 per unit, and variable costs are $300 per unit. Determine (a) whether variable costing income from operations is less than or greater than absorption costing income from operations, and (b) the difference in variable costing and absorption income from operations.

Accepted Answer

The answer of The beginning inventory is 10,000 units. All...

Question 11

Gyro Company manufactures Products T and W and is operating at full capacity. To manufacture Product W requires three times the number of machine hours required for Product T. Market research indicates that 1,000 additional units of Product W could be sold. The contribution margin by unit of product is as follows:

Accepted Answer

The answer of Gyro Company manufactures Products T and W...

Question 12

On October 31, the end of the first month of operations, Morristown & Co. prepared the following income statement based on absorption costing:

Accepted Answer

The answer of On October 31, the end of the...

Question 13

The beginning inventory is 5,000 units. All of the units manufactured during the period and 3,000 units of the beginning inventory were sold. The beginning inventory fixed costs are $25 per unit, and variable costs are $55 per unit. Determine (a) whether variable costing income from operations is less than or greater than absorption costing income from operations, and (b) the difference in variable costing and absorption income from operations.

Accepted Answer

The answer of The beginning inventory is 5,000 units. All...

Question 14

The following data are for Trendy Fashion Apparel:

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The answer of The following data are for Trendy Fashion...

Quiz 5: Variable Costing for Management Analysis