Question :
101. A business operated at 100% of capacity during its first : 1239535
101. A business operated at 100% of capacity during its first month, with the following results:
Sales (90 units)
$90,000
Production costs (100 units):
Direct materials
$40,000
Direct labor
20,000
Variable factory overhead
2,000
Fixed factory overhead
7,000
69,000
Operating expenses:
Variable operating expenses
$ 8,000
Fixed operating expenses
1,000
9,000
What is the amount of the contribution margin that would be reported on the variable costing income statement? A. $34,200B. $20,200C. $29,700D. $26,200
102. A business operated at 100% of capacity during its first month, with the following results:
Sales (90 units)
$90,000
Production costs (100 units):
Direct materials
$40,000
Direct labor
20,000
Variable factory overhead
2,000
Fixed factory overhead
7,000
69,000
Operating expenses:
Variable operating expenses
$ 8,000
Fixed operating expenses
1,000
9,000
What is the amount of the income from operations that would be reported on the variable costing income statement? A. $18,900B. $18,200C. $18,000D. $21,000
103. A business operated at 100% of capacity during its first month, with the following results:
Sales (90 units)
$90,000
Production costs (100 units):
Direct materials
$40,000
Direct labor
20,000
Variable factory overhead
2,000
Fixed factory overhead
7,000
69,000
Operating expenses:
Variable operating expenses
$ 8,000
Fixed operating expenses
1,000
9,000
What is the amount of the income from operations that would be reported on the absorption costing income statement? A. $21,000B. $18,900C. $18,200D. $27,900
104. A business operated at 100% of capacity during its first month, with the following results:
Sales (90 units)
$90,000
Production costs (100 units):
Direct materials
$40,000
Direct labor
20,000
Variable factory overhead
2,000
Fixed factory overhead
7,000
69,000
Operating expenses:
Variable operating expenses
$ 8,000
Fixed operating expenses
1,000
9,000
What is the amount of the gross profit that would be reported on the absorption costing income statement? A. $21,000B. $18,900C. $27,900D. $18,000
105. Accountants prefer the variable costing method over absorption costing method for evaluating the performance of a company because A. by using the absorption costing method, income could appear to be higher by producing more inventory.B. by using the absorption method, more sales will be generated. C. by using the variable costing method, the cost of goods sold will be higher as more units are manufactured and sales remain the same.D. by using the variable costing method, all fixed and variable costs are included in the unit cost of the product manufactured.
106. Under which inventory costing method could increases or decreases in income from operations be misinterpreted to be the result of operating efficiencies or inefficiencies? A. only variable costingB. only absorption costingC. both variable and absorption costingD. neither variable nor absorption costing
107. It would be acceptable to have the selling price of a product just above the variable costs and expenses of making and selling it in: A. the long runB. the short runC. both the short run and long runD. monopoly situations
108. Costs that can be influenced by management at a specific level of management are called: A. direct costs.B. indirect costs.C. noncontrollable costs.D. controllable costs.
109. Which of the following is(are) reason(s) for easy identification and control of variable manufacturing costs under the variable costing method? A. variable and fixed costs are reported separately.B. variable costs can be controlled by the operating management.C. fixed costs, such as property insurance, are normally the responsibility of higher management not the operating management.D. All of the above are true.
110. Which of the following is not true when determining the selling price for a product? A. Absorption costing should be used to determine routine pricing which include both fixed and variable costs.B. As long as the selling price is set above the variable costs, the company will make a profit in short run.C. Variable costing is effective when determining short run decisions, but absorption costing is only used for long-term pricing policies.D. Both variable and absorption pricing plans should be considered, to include several pricing alternatives.
