19) Letcher Corporation manufactures and sells one product. The following information pertains
to the company’s first year of operations:
Variable costs per unit:
Direct materials
$
89
Fixed costs per year:
Direct labor
$
616,000
Fixed manufacturing overhead
$
3,472,000
Fixed selling and administrative expenses
$
1,782,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 56,000 units
and sold 54,000 units. The company’s only product is sold for $227 per unit.
The net operating income for the year under super-variable costing is:
A) $1,604,000
B) $1,404,000
C) $1,582,000
D) $1,728,000
Sales ($227 per unit × 54,000 units)
$
12,258,000
unit × 54,000 units)
Contribution margin
Fixed expenses:
Direct labor
$
Fixed manufacturing costs
expense
Net operating income
$
20) Letcher Corporation manufactures and sells one product. The following information pertains
to the company’s first year of operations:
Variable costs per unit:
Direct materials
$
89
Fixed costs per year:
Direct labor
$
616,000
Fixed manufacturing overhead
$
3,472,000
Fixed selling and administrative expenses
$
1,782,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 56,000 units
and sold 54,000 units. The company’s only product is sold for $227 per unit.
The company is considering using either super-variable costing or a variable costing system that
assigns $11 of direct labor cost to each unit that is produced. Which of the following statements
is true regarding the net operating income in the first year?
A) Variable costing net operating income exceeds super-variable costing net operating income
by $124,000.
B) Super-variable costing net operating income exceeds variable costing net operating income by
$124,000.
C) Variable costing net operating income exceeds super-variable costing net operating income by
$22,000.
D) Super-variable costing net operating income exceeds variable costing net operating income by
$22,000.
21) Letcher Corporation manufactures and sells one product. The following information pertains
to the company’s first year of operations:
Variable costs per unit:
Direct materials
$
89
Fixed costs per year:
Direct labor
$
616,000
Fixed manufacturing overhead
$
3,472,000
Fixed selling and administrative expenses
$
1,782,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 56,000 units
and sold 54,000 units. The company’s only product is sold for $227 per unit.
The company is considering using either super-variable costing or an absorption costing system
that assigns $11 of direct labor cost and $62 of fixed manufacturing overhead to each unit that is
produced. Which of the following statements is true regarding the net operating income in the
first year?
A) Super-variable costing net operating income exceeds absorption costing net operating income
by $146,000.
B) Absorption costing net operating income exceeds super-variable costing net operating income
by $124,000.
C) Super-variable costing net operating income exceeds absorption costing net operating income
by $124,000.
D) Absorption costing net operating income exceeds super-variable costing net operating income
by $146,000.
22) Dallavalle Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials
$
93
Fixed costs per year:
Direct labor
$
320,000
Fixed manufacturing overhead
$
2,144,000
Fixed selling and administrative expenses
$
1,364,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 32,000 units
and sold 31,000 units. The company’s only product is sold for $238 per unit.
The unit product cost under super-variable costing is:
A) $214 per unit
B) $93 per unit
C) $170 per unit
D) $103 per unit
23) Dallavalle Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials
$
93
Fixed costs per year:
Direct labor
$
320,000
Fixed manufacturing overhead
$
2,144,000
Fixed selling and administrative expenses
$
1,364,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 32,000 units
and sold 31,000 units. The company’s only product is sold for $238 per unit.
Assume that the company uses a variable costing system that assigns $10 of direct labor cost to
each unit that is produced. The unit product cost under this costing system is:
A) $170 per unit
B) $214 per unit
C) $93 per unit
D) $103 per unit
Direct materials
Direct labor
Variable costing unit product cost
103
24) Dallavalle Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials
$
93
Fixed costs per year:
Direct labor
$
320,000
Fixed manufacturing overhead
$
2,144,000
Fixed selling and administrative expenses
$
1,364,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 32,000 units
and sold 31,000 units. The company’s only product is sold for $238 per unit.
Assume that the company uses an absorption costing system that assigns $10 of direct labor cost
and $67 of fixed manufacturing overhead to each unit that is produced. The unit product cost
under this costing system is:
A) $103 per unit
B) $214 per unit
C) $170 per unit
D) $93 per unit
Direct materials
Direct labor
Fixed manufacturing overhead
Absorption costing unit product cost
170
25) Dallavalle Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials
$
93
Fixed costs per year:
Direct labor
$
320,000
Fixed manufacturing overhead
$
2,144,000
Fixed selling and administrative expenses
$
1,364,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 32,000 units
and sold 31,000 units. The company’s only product is sold for $238 per unit.
The company is considering using either super-variable costing or a variable costing system that
assigns $10 of direct labor cost to each unit that is produced. Which of the following statements
is true regarding the net operating income in the first year?
A) Variable costing net operating income exceeds super-variable costing net operating income
by $10,000.
B) Super-variable costing net operating income exceeds variable costing net operating income by
$10,000.
C) Super-variable costing net operating income exceeds variable costing net operating income by
$67,000.
D) Variable costing net operating income exceeds super-variable costing net operating income
by $67,000.
26) Dallavalle Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials
$
93
Fixed costs per year:
Direct labor
$
320,000
Fixed manufacturing overhead
$
2,144,000
Fixed selling and administrative expenses
$
1,364,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 32,000 units
and sold 31,000 units. The company’s only product is sold for $238 per unit.
The company is considering using either super-variable costing or an absorption costing system
that assigns $10 of direct labor cost and $67 of fixed manufacturing overhead to each unit that is
produced. Which of the following statements is true regarding the net operating income in the
first year?
A) Super-variable costing net operating income exceeds absorption costing net operating income
by $1,000.
B) Super-variable costing net operating income exceeds absorption costing net operating income
by $77,000.
C) Absorption costing net operating income exceeds super-variable costing net operating income
by $77,000.
D) Absorption costing net operating income exceeds super-variable costing net operating income
by $1,000.
27) Marcelin Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials
$
92
Fixed costs per year:
Direct labor
$
1,122,000
Fixed manufacturing overhead
$
3,927,000
Fixed selling and administrative expenses
$
1,932,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 51,000 units
and sold 46,000 units. The company’s only product is sold for $276 per unit.
The unit product cost under super-variable costing is:
A) $191 per unit
B) $233 per unit
C) $114 per unit
D) $92 per unit
28) Marcelin Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials
$
92
Fixed costs per year:
Direct labor
$
1,122,000
Fixed manufacturing overhead
$
3,927,000
Fixed selling and administrative expenses
$
1,932,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 51,000 units
and sold 46,000 units. The company’s only product is sold for $276 per unit.
The net operating income for the year under super-variable costing is:
A) $1,593,000
B) $1,023,000
C) $1,978,000
D) $1,483,000
Sales ($276 per unit × 46,000 units)
$
12,696,000
unit × 46,000 units)
Contribution margin
Fixed expenses:
Direct labor
$
Fixed manufacturing costs
expense
Net operating income
$
29) Marcelin Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials
$
92
Fixed costs per year:
Direct labor
$
1,122,000
Fixed manufacturing overhead
$
3,927,000
Fixed selling and administrative expenses
$
1,932,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 51,000 units
and sold 46,000 units. The company’s only product is sold for $276 per unit.
The company is considering using either super-variable costing or a variable costing system that
assigns $22 of direct labor cost to each unit that is produced. Which of the following statements
is true regarding the net operating income in the first year?
A) Variable costing net operating income exceeds super-variable costing net operating income
by $110,000.
B) Super-variable costing net operating income exceeds variable costing net operating income by
$385,000.
C) Super-variable costing net operating income exceeds variable costing net operating income by
$110,000.
D) Variable costing net operating income exceeds super-variable costing net operating income
by $385,000.
30) Tremble Corporation manufactures and sells one product. The following information pertains
to the company’s first year of operations:
Variable costs per unit:
Direct materials
$
94
Fixed costs per year:
Direct labor
$
539,000
Fixed manufacturing overhead
$
3,675,000
Fixed selling and administrative expenses
$
1,350,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 49,000 units
and sold 45,000 units. The company’s only product is sold for $233 per unit.
The unit product cost under super-variable costing is:
A) $180 per unit
B) $105 per unit
C) $94 per unit
D) $210 per unit
31) Tremble Corporation manufactures and sells one product. The following information pertains
to the company’s first year of operations:
Variable costs per unit:
Direct materials
$
94
Fixed costs per year:
Direct labor
$
539,000
Fixed manufacturing overhead
$
3,675,000
Fixed selling and administrative expenses
$
1,350,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 49,000 units
and sold 45,000 units. The company’s only product is sold for $233 per unit.
The net operating income for the year under super-variable costing is:
A) $735,000
B) $1,035,000
C) $691,000
D) $315,000
Sales ($233 per unit × 45,000 units)
$
10,485,000
unit × 46,000 units)
Contribution margin
Fixed expenses:
Direct labor
$
Fixed manufacturing costs
expense
Net operating income
$
32) Tremble Corporation manufactures and sells one product. The following information pertains
to the company’s first year of operations:
Variable costs per unit:
Direct materials
$
94
Fixed costs per year:
Direct labor
$
539,000
Fixed manufacturing overhead
$
3,675,000
Fixed selling and administrative expenses
$
1,350,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 49,000 units
and sold 45,000 units. The company’s only product is sold for $233 per unit.
Assume that the company uses a variable costing system that assigns $11 of direct labor cost to
each unit that is produced. The unit product cost under this costing system is:
A) $105 per unit
B) $180 per unit
C) $94 per unit
D) $210 per unit
Direct materials
Direct labor
Variable costing unit product cost
105
33) Tremble Corporation manufactures and sells one product. The following information pertains
to the company’s first year of operations:
Variable costs per unit:
Direct materials
$
94
Fixed costs per year:
Direct labor
$
539,000
Fixed manufacturing overhead
$
3,675,000
Fixed selling and administrative expenses
$
1,350,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 49,000 units
and sold 45,000 units. The company’s only product is sold for $233 per unit.
Assume that the company uses a variable costing system that assigns $11 of direct labor cost to
each unit that is produced. The net operating income under this costing system is:
A) $1,035,000
B) $691,000
C) $315,000
D) $735,000
34) Tremble Corporation manufactures and sells one product. The following information pertains
to the company’s first year of operations:
Variable costs per unit:
Direct materials
$
94
Fixed costs per year:
Direct labor
$
539,000
Fixed manufacturing overhead
$
3,675,000
Fixed selling and administrative expenses
$
1,350,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 49,000 units
and sold 45,000 units. The company’s only product is sold for $233 per unit.
Assume that the company uses an absorption costing system that assigns $11 of direct labor cost
and $75 of fixed manufacturing overhead to each unit that is produced. The unit product cost
under this costing system is:
A) $94 per unit
B) $180 per unit
C) $105 per unit
D) $210 per unit
Direct materials
Direct labor
Fixed manufacturing overhead
Absorption costing unit product cost
180