Which accounting method variable or absorption would have produced the higher net income for May?

Question

Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each of the following costs, identify the cost graph that best illustrates its cost behavior as the number of units produced increases. a. Direct material cost per unit. b. Fees for using a patent of $500,000 plus $0.25 for each unit produced. c. Salary of quality control supervisor. d. Straight-line depreciation per unit on factory equipment. e. Total direct materials cost.

The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?

The following product Costs are available for Haworth Company on the production of chairs: direct materials, $15,500; direct labor, $22.000; manufacturing overhead, $16.500; selling expenses, $6,900; and administrative expenses, $15,200. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 7,750 equivalent units are produced, what is the equivalent material cost per unit? If 22,000 equivalent units are produced, what is the equivalent conversion cost per unit?

Cool Pool has these costs associated with production of 20,000 units of accessory products: direct materials, $70; direct labor, $110; variable manufacturing overhead, $45; total fixed manufacturing overhead, $800,000. What is the cost per unit under both the variable and absorption methods?

Wonder Woman Company produced 10,000 units and sold 9,000 units. Fixed manufacturing overhead costs were P20,000, and variable manufacturing overhead costs were P3 per unit. Which of the following best describes the net income under the absorption costing method? Select one: a. P5,000 less than the net income under the variable costing method b. P5,000 more than the net income under the variable costing method c. P2,000 more than the net income under the variable costing method d. P2,000 less than the net income under the variable costing method

The following costs pertain to Juan Corporation’s only product Leather: Direct Materials P 10.00/unit Direct Labor P 12.00/unit Variable Overhead P 5.00/unit Fixed Overhead* P 8.00/unit Variable Selling & Administrative P 2.00/unit Fixed Selling & Administrative* P 10.00/unit *Based on 10,000 units Compute the cost of sale and ending inventories under the following assumption using (a) Variable Costing and (b) Absorption Costing

The following costs pertain to Bulacan Corporation’s only product Leather: Direct Materials P 10.00/unit Direct Labor P 12.00/unit Variable Overhead P 5.00/unit Fixed Overhead* P 8.00/unit Variable Selling & Administrative P 2.00/unit Fixed Selling & Administrative* P 10.00/unit *Based on 10,000 units 1. Compute the product costs under the following techniques: Throughput, Variable, and Absorption

Manny Co. reported the following per unit cost for the period just ended: Direct materials P20 Direct labor P24 Variable overhead P2 Fixed overhead P14 Variable selling & administrative P4 Fixed selling & administrative P6 If the company were using the absorption approach or cost-plus pricing, and adds a 50% markup to price its product, the selling price per unit would be Group of answer choices P69 P75 P105 P90

T3-7 Variable costing versus absorption costing (LO 1, 2) The following data were prepared by the Waco Wagon Company. Total Variable Fixed Sales price $20/unit Direct materials used $ 90,000 Direct labor $ 99,000 Manufacturing overhead $ 90,000 $ 9,000 $81,000 Selling and administrative expense $ 23,000 $14,000 $ 9,000 Units manufactured 18,000 units Beginning Finished Goods Inventory 20,000 units Ending Finished Goods Inventory 24,000 units Required a.Under absorption costing, what is the unit product cost? b.Under variable costing, what is the unit product cost? c.Under absorption costing, what is the cost of goods sold? d.Under variable costing, what is the cost of goods sold? e.Under absorption costing, what is the operating income? f.Under variable costing, what is the operating income? g.Reconcile the difference in operating income under absorption costing versus variable costing.

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Asked by BarristerHummingbird479 on coursehero.com

Question 1 Which of the following statements is correct? a. When production is not equal to sales, income under absorption costing differs from income under variable costing due to the difference in treatment of the fixed overhead cost under the two costing methods b. In absorption costing system, fixed overhead cost is treated as period cost. c. In variable costing system, fixed overhead cost is included as part of the cost of inventory d. In a variable costing income statement, sales revenue is typically higher than absorption costing income statement Question 2 Which of the following statements is true? a. Income under absorption costing is always greater than income under variable costing b. Depreciation expense is always a period cost c. Selling and administrative costs, whether variable or fixed, is always treated as period costs under both absorption and variable costing system d. Depreciation expense is always a product cost Question 3 If production is less than sales in unit, then absorption costing net income will generally be a. Less than expected b. Equal to variable costing net income c. Less than variable costing net income d. Greater than variable costing net income Question 4 If a firm uses variable costing a. It calculates an idle facility variation b. Its profit fluctuates with sales c. Its product cost per unit changes because of changes in the number of units produced d. Its product costs include variable selling and administrative costs Question 5 The inventory costing method that treats direct manufacturing costs and indirect manufacturing cost, both variable and fixed, as inventoriable cost is called a. Conversion costing b. Perpetual inventory c. Variable costing d. Absorption costing Question 6 Which of the following statements regarding absorption and variable costing is correct? a. Absorption costing results in higher income when finished goods inventory increases b. Variable manufacturing costs are lower under absorption costing c. Profits are always the same under the two costing methods d. Overhead costs are treated in the same manner under both variable and absorption costing methods. Question 7 Which of the following must be known about a production process to institute a variable costing system? a. Standard quantities and prices for all production inputs b. The direct and indirect costs related to production c. The variable and fixed components of manufacturing costs d. The capacity level or denominator level to be used in allocating fixed overhead costs Question 8 What costs are treated as product cost under variable costing a. All manufacturing costs b. Only variable production costs c. All direct costs only d. All variable costs Question 9 Which of the following costing methods is not acceptable for external reporting? a. Process costing b. Activity-based costing c. Absorption costing d. Variable costing Question 11 Income under absorption costing may differ from income under variable costing. The difference in income between the two costing methods is equal to the change of the quantity of all units a. Produced multiplied by the variable manufacturing cost per unit b. Sold multiplied by the selling price per unit c. Sold multiplied by the fixed factory overhead cost per unit d. In inventory multiplied by the fixed factory overhead cost per unit Question 12 Net income computed using absorption costing can be reconciled to net income computed using variable costing by computing the difference between a. The product cost per unit under the two costing methods b. The gross profit under absorption costing and contribution margin under variable costing c. The selling price under two costing method d. Inventoried fixed factory overhead costs in the beginning and ending finished goods inventories Question 13 Which of the following statements is correct? a. Unit variable costs change directly with the cost driver or activity level b. Gross margin and contribution margin are the same c. One inherent simplifying assumption in CVP analysis is productions equals sales d. Contribution margin is the excess of sales over variable costs, and this is the amount available for the recovery of fixed assets and generation of profit Question 14 The type of costing system that will provide the best information for CVP and Break-even analysis if inventories are expected to change is a. Job order costing b. Variable costing c. Process costing d. Absorption Costing Question 15 Result of income are the same in both absorption and variable costing methods when a. When variable overhead cost per unit are the same. b. When Sales exceeds production c. Production exceeds sales d. Production and sales are the same

Answered by ProfessorFog901 on coursehero.com

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