Homework Answers
The only difference between absorption costing and variable costing is that the fixed manufacturing overhead becomes a part of product cost under absorption costing while it is charged as a period cost under variable costing.
When number of units produces equals the number of units sold, following will be true
Absorption costing net income is equal to variable costing net income
Under both absorption costing and variable costing, all fixed overhead incurred flows through the income statement
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Select all the correct statements regarding a time period in which the number of units produced...
ssuming the number of units sold and produced are the same (Sales = Production), which of...
ssuming the number of units sold and produced are the same (Sales = Production), which of the Following statements is TRUE when comparing net income using absorption and variable costing. a. Absorption costing will yield a higher net income. b. Variable costing will yield a higher net income. c. Net income will be the same under both methods. d. Variable costing will have higher sales revenue. Assuming that the number of units produced is greater than the number of units...
Knowledge Check 01 The difference between absorption costing net operating income and variable costing net operating...
Knowledge Check 01 The difference between absorption costing net operating income and variable costing net operating income can be explained by the way these two methods account for ________. all overhead costs fixed overhead costs selling and administrative expenses variable overhead costs Knowledge Check 02 Absorption costing income statements ignore ________. direct materials and direct labor costs direct and indirect cost distinctions product and period cost distinctions variable and fixed cost distinctions Knowledge Check 03 When the number of units...
3,000 2,500 350 $ Number of units produced Number of units sold Unit sales price Direct...
3,000 2,500 350 $ Number of units produced Number of units sold Unit sales price Direct materials per unit Direct labor per unit Variable manufacturing overhead per unit Fixed manufacturing overhead per unit ($225,000 - 3,000 units) Total variable selling expenses ($15 per unit sold) Total fixed general and administrative expenses 80 60 10 75 37,500 65,000 Required: Prepare Crystal Cold's full absorption costing income statement and variable costing income statement for the year. CRYSTAL COLD COOLERS INC. Full Absorption...
Determine which of the statements below are accurate regarding how a petty cash fund is created...
Determine which of the statements below are accurate regarding how a petty cash fund is created and used in a business. (Check all that apply.) Check all that apply. When the fund is replenished, the Petty Cash fund account is debited. Any employee may disburse cash from the fund as long as they bring back a receipt for their purchase. The petty cashier is responsible for making payments from the petty cash fund. The petty cashier is responsible for keeping...
For each of the statements below, use the dropdown box to select the response that completes the sentence correctly. Knowledge Check 01 When the units produced are equal to the units sold, net operat...
For each of the statements below, use the dropdown box to select the response that completes the sentence correctly. Knowledge Check 01 When the units produced are equal to the units sold, net operating income computed using the absorption costing approach is the net operating income computed using the variable costing approach. Knowledge Check 01 Which of the following costing approaches is best suited for cost-volume-profit analysis? Absorption Normal Standard Variable Knowledge Check 01 The use of absorption costing for...
Ned's Entrees produces frozen meals, which it sells for $ 10 each. The company uses the...
Ned's Entrees produces frozen meals, which it sells for $ 10 each. The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from the company's first two months in business: LOADING...(Click the icon to view the data.) Requirements 1. Compute the product cost per meal produced under absorption costing...
Question 1 (2 points) Which of the following is true regarding the absorption costing method of...
Question 1 (2 points) Which of the following is true regarding the absorption costing method of calculating income? O A) Absorption costing and variable costing will produce the same net income if all of the units produced are sold. O B) Absorption costing treats the fixed overhead allocated to units produced as a period cost. U C) Absorption costing will produce a smaller net income than variable costing if the number of units produced is greater than the number of...
When units produced are less than units sold, as in year 2 for Harvey, absorption costing...
When units produced are less than units sold, as in year 2 for Harvey, absorption costing income is less than variable costing income. True or false?
Consider the following information for Presidio Inc.'s most recent year of operations. Number of units produced...
Consider the following information for Presidio Inc.'s most
recent year of operations.
Number of units produced
2,900
Number of units sold
1,700
Sales price per unit
$
790.00
Direct materials per unit
75.00
Direct labor per unit
105.00
Variable manufacturing overhead per unit
55.00
Fixed manufacturing overhead per unit ($346,550 ÷ 2,900
units)
119.50
Total variable selling expenses ($12 per unit sold)
20,400.00
Total fixed general and administrative expenses
90,000.00
Required:
2-a. Complete a full absorption costing income statement
for...
Absorption-Costing Income Statement During the most recent year, Osterman Company had the following data: Units in...
Absorption-Costing Income Statement During the most recent year, Osterman Company had the following data: Units in beginning inventory Units produced Units sold ($47 per unit) Variable costs per unit: 10,000 9,300 Direct materials Direct labor Variable overhead Fixed costs: Fixed overhead per unit produced Fixed selling and administrative $138,000 Required: 1. Calculate the cost of goods sold under absorption costing. $223,200 Feedback Check My Work Determine per-unit cost under absorption costing and apply the unit cost to the number of...
ssuming the number of units sold and produced are the same (Sales = Production), which of the Following statements is TRUE when comparing net income using absorption and variable costing. a. Absorption costing will yield a higher net income. b. Variable costing will yield a higher net income. c. Net income will be the same under both methods. d. Variable costing will have higher sales revenue. Assuming that the number of units produced is greater than the number of units...
3,000 2,500 350 $ Number of units produced Number of units sold Unit sales price Direct materials per unit Direct labor per unit Variable manufacturing overhead per unit Fixed manufacturing overhead per unit ($225,000 - 3,000 units) Total variable selling expenses ($15 per unit sold) Total fixed general and administrative expenses 80 60 10 75 37,500 65,000 Required: Prepare Crystal Cold's full absorption costing income statement and variable costing income statement for the year. CRYSTAL COLD COOLERS INC. Full Absorption...
Determine which of the statements below are accurate regarding how a petty cash fund is created and used in a business. (Check all that apply.) Check all that apply. When the fund is replenished, the Petty Cash fund account is debited. Any employee may disburse cash from the fund as long as they bring back a receipt for their purchase. The petty cashier is responsible for making payments from the petty cash fund. The petty cashier is responsible for keeping...
For each of the statements below, use the dropdown box to select the response that completes the sentence correctly. Knowledge Check 01 When the units produced are equal to the units sold, net operating income computed using the absorption costing approach is the net operating income computed using the variable costing approach. Knowledge Check 01 Which of the following costing approaches is best suited for cost-volume-profit analysis? Absorption Normal Standard Variable Knowledge Check 01 The use of absorption costing for...
Question 1 (2 points) Which of the following is true regarding the absorption costing method of calculating income? O A) Absorption costing and variable costing will produce the same net income if all of the units produced are sold. O B) Absorption costing treats the fixed overhead allocated to units produced as a period cost. U C) Absorption costing will produce a smaller net income than variable costing if the number of units produced is greater than the number of...
Consider the following information for Presidio Inc.'s most
recent year of operations.
Number of units produced
2,900
Number of units sold
1,700
Sales price per unit
$
790.00
Direct materials per unit
75.00
Direct labor per unit
105.00
Variable manufacturing overhead per unit
55.00
Fixed manufacturing overhead per unit ($346,550 ÷ 2,900
units)
119.50
Total variable selling expenses ($12 per unit sold)
20,400.00
Total fixed general and administrative expenses
90,000.00
Required:
2-a. Complete a full absorption costing income statement
for...
Absorption-Costing Income Statement During the most recent year, Osterman Company had the following data: Units in beginning inventory Units produced Units sold ($47 per unit) Variable costs per unit: 10,000 9,300 Direct materials Direct labor Variable overhead Fixed costs: Fixed overhead per unit produced Fixed selling and administrative $138,000 Required: 1. Calculate the cost of goods sold under absorption costing. $223,200 Feedback Check My Work Determine per-unit cost under absorption costing and apply the unit cost to the number of...
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