Question : 51) Which of the following criteria should be used to : 1186352

 

51) Which of the following criteria should be used to evaluate management according to critics of absorption costing?

A) the extent to which inventory production matches demand

B) the extent to which financial performance measures are used

C) the extent to which operating income is increased in the short run

D) the extent to which production quotas are exceeded

E) We should rely only on financial criteria to measure performance.

 

52) Which denominator level is required by Canada Revenue Agency for income tax reporting?

A) master-budget capacity without full proration of variances between inventories and cost of goods sold

B) practical capacity without full proration of variances between inventories and cost of goods sold

C) normal capacity with full proration of variances between inventories and cost of goods sold

D) practical capacity with full proration of variances between inventories and cost of goods sold

E) master-budget capacity with full proration of variances between inventories and cost of goods sold

Answer the following question(s) using the information below.

 

Marie’s Decorating produces and sells a mantel clock for $100 per unit. In 2012, 100,000 clocks were produced and 80,000 were sold. Other information for the year includes:

 

Direct materials

$30.00 per unit

Direct manufacturing labour

$2.00 per unit

Variable manufacturing costs

$3.00 per unit

Sales commissions

$5.00 per part

Fixed manufacturing costs

$25.00 per unit

Administrative expenses, all fixed

$15.00 per unit

 

53) What is the inventoriable cost per unit using variable costing?

A) $32

B) $35

C) $40

D) $60

E) $75

 

54) What is the inventoriable cost per unit using absorption costing?

A) $32

B) $35

C) $40

D) $60

E) $75

Answer the following question(s) using the information below.

 

Gabe’s Auto produces and sells an auto part for $30.00 per unit. In 2012, 100,000 parts were produced and 75,000 units were sold. Other information for the year includes:

 

Direct materials

$12.00 per unit

Direct manufacturing labour

$2.25 per unit

Variable manufacturing costs

$0.75 per unit

Sales commissions

$3.00 per part

Fixed manufacturing costs

$375,000 per year

Administrative expenses, all fixed

$135,000 per year

 

55) What is the inventoriable cost per unit using variable costing?

A) $14.25

B) $15.00

C) $18.75

D) $20.10

E) $20.00

 

56) What is the inventoriable cost per unit using absorption costing?

A) $14.25

B) $15.00

C) $18.75

D) $20.10

E) $20.00

Answer the following question(s) using the information below.

 

Peggy’s Pillows produces and sells a decorative pillow for $75.00 per unit. In the first month of operation, 2,000 units were produced and 1,750 units were sold. Actual fixed costs are the same as the amount budgeted for the month. Other information for the month includes:

 

Variable manufacturing costs

$20.00 per unit

Variable marketing costs

$3.00 per unit

Fixed manufacturing costs

$7.00 per unit

Administrative expenses, all fixed

$15.00 per unit

Ending inventories:

 

   Direct materials

-0-

   WIP

-0-

   Finished goods

250 units

 

57) What is cost of goods sold per unit using variable costing?

A) $45

B) $30

C) $27

D) $23

E) $20

 

58) What is cost of goods sold using variable costing?

A) $35,000

B) $40,250

C) $47,250

D) $52,500

E) $78,750

 

59) What is contribution margin using variable costing?

A) $96,250

B) $91,000

C) $84,000

D) $78,750

E) $52,500

60) What is operating income using variable costing?

A) $52,500

B) $78,750

C) $65,750

D) $47,000

E) $40,000