Question :
71)
Which denominator-level concept results in the highest amount of fixed : 1196291
71)
Which denominator-level concept results in the highest amount of fixed manufacturing overhead costs per unit of ending inventory? 71)
______ A)
master budget utilization B)
flexible budget equalization C)
normal capacity utilization D)
theoretical capacity E)
practical capacity
72)
CCRA effectively eliminates the use of certain denominator-level concepts through its income tax rulings. The eliminated concept(s) for tax purpose is(are)
72)
______ A)
production analysis. B)
budget analysis. C)
master budget utilization D)
statistical analysis. E)
theoretical capacity or practical capacity.
73)
Which denominator level is required by CCRA for income tax reporting? 73)
______ A)
production analysis. B)
master budget utilization with full proration of variances between inventories and cost of goods sold C)
statistical analysis. D)
flexible budget utilization. E)
master budget utilization without full proration of variances between inventories and cost of goods sold
74)
Using ________ capacity fixes the cost of capacity at the cost of supplying the capacity regardless of the demand for capacity. 74)
______ A)
theoretical B)
flexible C)
practical D)
variable E)
full cost
75)
________ utilization is an average that provides no meaningful feedback to the marketing manager for a particular year. 75)
______ A)
planned unused capacity B)
master budget capacity C)
practical capacity D)
flexible budget capacity E)
normal capacity
SHORT ANSWER.
Write the word or phrase that best completes each statement or answers the question. 76)
Amalgamated Glass and Mirror, Inc. had sales of 37,500 units and production of 50,000 units. Other information for the year included:
Direct manufacturing labour$375,000
Variable manufacturing overhead200,000
Direct materials300,000
Variable selling expenses200,000
Fixed administrative expenses200,000
Fixed manufacturing overhead 400,000
There was no beginning inventory.
Required:
a.Compute the ending finished goods inventory under both absorption and variable.
b.Compute the cost of goods sold under both absorption and variable costing. 76)
_____________
77)
For 2007, Nichols, Inc., had sales of 75,000 units and production of 100,000 units.
Other information for
the year included:
Direct manufacturing labor$187,500
Variable manufacturing overhead100,000
Direct materials150,000
Variable selling expenses100,000
Fixed administrative expenses100,000
Fixed manufacturing overhead200,000
There was no beginning inventory.
Required:
a.Compute the ending finished goods inventory under both absorption and variable costing.
b.Compute the cost of goods sold under both absorption and variable costing.
77)
_____________
78)
Ace Products sells its products for $22 each. Unit manufacturing costs are: direct materials, $4.00; direct manufacturing labour, $6.00; and variable manufacturing overhead, $3.00. Total fixed manufacturing overhead costs are $60,000 and marketing expenses are $2.00 per unit plus $20,000 per year. The current production level is 25,000 units although only 20,000 units are anticipated to be sold.
Required:
a.Prepare an income statement using absorption costing.
b.Prepare an income statement using variable costing. 78)
_____________
79)
Bruster Company sells its products for $66 each. The current production level is 25,000 units, although
only 20,000 units are anticipated to be sold.
Unit manufacturing costs are:
Direct materials$12.00
Direct manufacturing labor$18.00
Variable manufacturing costs$9.00
Total fixed manufacturing costs$180,000
Marketing expenses$6.00 per unit, plus $60,000 per year
Required:
a.Prepare an income statement using absorption costing.
b.Prepare an income statement using variable costing.
79)
_____________
80)
Ewing Company planned to be in operation for three years. During the first year, it had no sales but incurred $120,000 in variable manufacturing expenses and $40,000 in fixed manufacturing expenses. In the next year, it sold half of the finished goods inventory from the previous year for $100,000 but it had no manufacturing costs. In the third year, it sold the remainder of the inventory for $120,000, had no manufacturing expenses and went out of business. Marketing and administrative expenses were fixed and totalled $20,000 each year.
Required:
a.Prepare an income statement for each year using absorption costing.
b.Prepare an income statement for each year using variable costing. 80)
_____________
