81) The net income under variable costing would be

A) $32,000.

B) $44,000.

C) $50,000.

D) $66,000.

82) Under variable costing, which manufacturing cost is expensed as a period cost?

A) Fixed manufacturing overhead.

B) Direct materials.

C) Variable manufacturing overhead.

D) Direct labour.

83) In variable costing, costs are separated into the major categories of

A) manufacturing and non-manufacturing.

B) manufacturing and fixed.

C) fixed and variable.

D) variable and non-manufacturing.

84) In variable costing, revenue less all variable costs is

A) gross margin.

B) operating income.

C) contribution margin.

D) net income.

A company has the following information:

Beginning inventories

none

Raw materials used

$  50,000

Sales ($130 per unit)

$156,000

Direct labour

$  84,000

Variable factory overhead

$  34,000

Fixed factory overhead

unknown

Variable selling and administrative

$    6,000

Fixed selling and administrative

$  10,000

Gross profit

$  60,000

Contribution margin

unknown

Ending inventories

Raw materials

$  14,000

WIP

none

Finished goods

1,200 units

85) How much factory overhead is included in the ending inventory under absorption costing?

A) $24,000

B) $12,000

C) $16,800

D) $-0-

DeJager Company reported the following information about the production and sales of its only product:

Direct materials used

$32,000

Direct labour

$20,000

Variable factory overhead

$12,000

Fixed factory overhead

$16,000

Variable selling and administrative expenses

$  4,000

Fixed selling and administrative expenses

$  6,000

Beginning inventories

none

Ending inventories:

Direct materials

-0-

WIP

-0-

Finished goods

600 units

Sales ($45 per unit)

$63,000

86) The cost of goods sold under absorption costing would be

A) $56,000.

B) $63,000.

C) $44,800.

D) $36,400.

87) The gross profit under absorption costing would be

A) $26,600.

B) $18,200.

C) $ -0-.

D) $ 7,000.

88) The operating income (loss) under absorption costing would be

A) $ 16,600.

B) $  8,200.

C) $( 3,000).

D) $(10,000).

Schultz Company reported the following information about the production and sales of its only product:

Direct materials used

$64,000

Direct labour

$40,000

Variable factory overhead

$24,000

Fixed factory overhead

$32,000

Variable selling and administrative expenses

$  8,000

Fixed selling and administrative expenses

$12,000

Beginning inventories

none

Ending inventories:

Direct materials

-0-

WIP

-0-

Finished goods

600 units

Sales ($90 per unit)

$126,000

89) The cost of goods sold under absorption costing would be

A) $112,000.

B) $126,000.

C) $ 89,600.

D) $ 72,800.

90) The gross profit under absorption costing would be

A) $53,200.

B) $36,400.

C) $ -0-.

D) $14,000.



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