Question

11.

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:

Units in beginning inventory	0
Units produced	4,150
Units sold	4,050
Units in ending inventory	100

Variable costs per unit:

Direct materials	$	44
Direct labor	$	46
Variable manufacturing overhead	$	9
Variable selling and administrative	$	7

Fixed costs:

Fixed manufacturing overhead	$	87,150
Fixed selling and administrative	$	40,500

What is the variable costing unit product cost for the month?

$106 per unit

$127 per unit

$99 per unit

$117 per unit

12.

Olds Inc., which produces a single product, has provided the following data for its most recent month of operations:

Number of units produced	10,700
Variable costs per unit:
Direct materials	$108
Direct labor	$51
Variable manufacturing overhead	$7
Variable selling and administrative expense	$9
Fixed costs:
Fixed manufacturing overhead	$417,300
Fixed selling and administrative expense	$834,600

There were no beginning or ending inventories. The absorption costing unit product cost was:

$159 per unit

$205 per unit

$166 per unit

$292 per unit

13.

A company produces a single product. Variable production costs are $12.5 per unit and variable selling and administrative expenses are $3.5 per unit. Fixed manufacturing overhead totals $41,000 and fixed selling and administration expenses total $45,000. Assuming a beginning inventory of zero, production of 4,500 units and sales of 3,850 units, the dollar value of the ending inventory under variable costing would be:

$8,125

$13,975

$10,400

$5,850

14.

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:

Selling price	$176
Units in beginning inventory	0
Units produced	12,900
Units sold	12,500
Units in ending inventory	400
Variable cost per unit:
Direct materials	$54
Direct labor	$48
Variable manufacturing overhead	$12
Variable selling and administrative	$8
Fixed costs:
Fixed manufacturing overhead	$412,800
Fixed selling and administrative	$225,000

What is the total period cost for the month under variable costing?

$412,800

$325,000

$637,800

$737,800

15.

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:

Selling price	$140
Units in beginning inventory	0
Units produced	3,150
Units sold	2,760
Units in ending inventory	390
Variable cost per unit:
Direct materials	$47
Direct labor	$18
Variable manufacturing overhead	$10
Variable selling and administrative	$19
Fixed costs:
Fixed manufacturing overhead	$107,100
Fixed selling and administrative expenses	$24,840

The total gross margin for the month under absorption costing is:

$85,560

$8,280

$116,160

$126,960

16.

Brummitt Corporation has two divisions: the BAJ Division and the CBB Division. The corporation's net operating income is $11,400. The BAJ Division's divisional segment margin is $79,600 and the CBB Division's divisional segment margin is $45,100. What is the amount of the common fixed expense not traceable to the individual divisions?

$91,000

$113,300

$56,500

$124,700

17.

Koen Corporation has two divisions: Division A and Division B. Last month, the company reported a contribution margin of $40,000 for Division A. Division B had a contribution margin ratio of 30% and its sales were $257,000. Net operating income for the company was $36,300 and traceable fixed expenses were $59,900. Koen Corporation's common fixed expenses were:

$20,900

$59,900

$80,800

$117,100

18.

Insider Corporation has two divisions, J and K. During March, the contribution margin in Division J was $33,000. The contribution margin ratio in Division K was 40%, its sales were $128,000, and its segment margin was $35,000. The common fixed expenses in the company were $43,000, and the company's net operating income was $19,500. The segment margin for Division J was:

$27,500

$35,000

$8,000

$62,500

19.

Farron Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

Selling price	$104
Units in beginning inventory	0
Units produced	8,850
Units sold	8,450
Units in ending inventory	400
Variable costs per unit:
Direct materials	$16
Direct labor	$58
Variable manufacturing overhead	$4
Variable selling and administrative	$8
Fixed costs:
Fixed manufacturing overhead	$132,750
Fixed selling and administrative	$8,600

What is the net operating income for the month under variable costing?

$10,750

$(20,450)

$16,750

$6,000

20.

Farron Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

Selling price	$124
Units in beginning inventory	0
Units produced	9,100
Units sold	8,700
Units in ending inventory	400
Variable costs per unit:
Direct materials	$21
Direct labor	$63
Variable manufacturing overhead	$9
Variable selling and administrative	$13
Fixed costs:
Fixed manufacturing overhead	$136,500
Fixed selling and administrative	$9,100

What is the net operating income for the month under absorption costing?

$26,200

$11,000

$17,000

$6,000

Answer 1

11. $99 per unit (Add Direct materials, Direct labor and Variable manufacturing cost per unit)

12. $205 per unit

Units produced	10,700
Materials	108	1,155,600
Labor	51	545,700
Variable o/h	7	74,900
Fixed o/h	39*	417,300
Total	205	2,193,500

* 417,300/10,700 = 39

13. $8,125

Ending Inventory = 4,500- 3,850

Valued @ product unit cost $12.5 per unit under variable costing

14. Total period cost under variable costing = Fixed manufacturing + Fixed selling/ administrative

412,800+225,000 = 637,800

15.$85,560

Cost of goods sold
Direct Materials	47
Direct Labor	18
Variable o/h	10
Fixed o/h	34
Cost per unit	109

Selling price per unit = 140

Gross margin per unit = 31

Total gross margin = 2,760*31 = 85,560

16.113,300

Total segmental margin of both units = 124,700

Less: Net operating income = 11,400

Fixed expenses not traceable to segments = 113,300

17. 20,900

Contribution margin of Division A = 40,000

+Contribution margin of Division B = 257000*30% = 77,100

Total = 117,100

Fixed expenses - treaceable = 59,900

less: Net operating income = 36,300

Non traceable Fixed expenses = 20,900