Question :
31)
Variable costing regards fixed manufacturing overhead as 31)
______ A)
an inventoriable : 1196287
31)
Variable costing regards fixed manufacturing overhead as 31)
______ A)
an inventoriable cost. B)
an unexpired cost. C)
a product cost. D)
a charge against sales. E)
a deferred asset.
Use the information below to answer the following question(s).
Beauty Supply Company manufactures shampoo. Your supervisor has provided you with the following information and informs you that standard costing is used for manufacturing, marketing, and administrative costs.
January February
Beginning inventory0—
Production2,5003,000
Sales2,2503,025
Other information:
Selling price$ 20.00
Standard variable manufacturing cost/unit$ 8.00
Standard variable market/admin. cost/unit$ 4.00
Standard fixed manufacturing overhead cost/month $40,000
Standard fixed market/admin. cost/month$20,000
Budgeted denominator level per month (output units)4,000
There were no beginning or ending inventories of materials or work in process.
32)
What is the per unit variable cost? 32)
______ A)
$18.00 B)
$11.00 C)
$12.00 D)
$14.00 E)
$22.00
33)
What is the per unit manufacturing cost? 33)
______ A)
$20.00 B)
$12.00 C)
$11.00 D)
$14.00 E)
$18.00
34)
What would Beauty Supply Company’s operating income (loss) be for January and February, respectively, using the variable costing approach? 34)
______ A)
$18,000 and ($35,800) B)
$(42,000) and $(35,800) C)
$(45,000) and $(35,500) D)
$18,000 and $24,200 E)
$(44,000) and $(33,809)
35)
Advanced Lighting’s total variable costs are $102 and total manufacturing costs are $98. Standard variable marketing/administrative costs constitute 20 percent of the total variable costs. Respectively, what are Advanced Lighting’s standard variable manufacturing costs and standard fixed manufacturing costs? 35)
______ A)
$81.60 and $16.40 B)
$77.60 and $81.60 C)
$78.40 and $98.00 D)
$78.40 and $16.40 E)
$81.60 and $77.60
36)
When the distinction between variable and fixed costs is one of the important elements in the preparation of the income statement, the method used should be the 36)
______ A)
absorption method B)
contribution margin method. C)
capitalization method. D)
gross margin method. E)
inventorial method.
37)
Which of the following is incorrect concerning variable vs absorption costing? 37)
______ A)
the difference in operating income between the two approaches is captured by the difference between fixed manufacturing costs in ending inventory minus fixed manufacturing costs in opening inventory B)
the variable costing income statement classifies costs by cost behaviour C)
the difference in operating income between the two approaches is captured by the difference between fixed manufacturing costs in ending inventory minus variable manufacturing costs in ending inventory D)
absorption costing income statements do not need to differentiate between variable and fixed costs E)
absorption costing income statement classifies costs primarily by business function
38)
Which of the following variances exists only under absorption costing? 38)
______ A)
efficiency variances B)
variable overhead flexible budget variance C)
spending variance D)
production-volume variance E)
sales-volume variance
39)
Car Tunes produces car radios. Actual fixed manufacturing overhead is the same as the budgeted amount, $330,000. Production in September increased by 10% over the previous month’s production. August’s production was 5,000 radios. The production level is the same as the budgeted denominator level. At the end of September, 1,000 radios remained in stock. In August, all of the radios were sold by the end of the month and there was no remaining work in process inventory.
What are the appropriate period costs for September if variable costing is used? 39)
______ A)
$550,000 B)
$583,000 C)
$330,000 D)
$630,000 E)
$363,000
40)
Car Tunes produces car radios. Actual fixed manufacturing overhead is the same as the budgeted amount, $330,000. Production in September increased by 10% over the previous month’s production. August’s production was 5,000 radios. The production level is the same as the budgeted denominator level. At the end of September, 1,000 radios remained in stock. In August, all of the radios were sold by the end of the month and there was no remaining work in process inventory.
What is the September cost of goods sold amount if absorption costing is used? 40)
______ A)
$258,600 B)
$300,000 C)
$266,000 D)
$630,000 E)
$270,000
