35) 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 net operating income
under this costing system is:
A) $315,000
B) $1,035,000
C) $735,000
D) $691,000
36) Stubenrauch Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials
$
91
Fixed costs per year:
Direct labor
$
532,000
Fixed manufacturing overhead
$
2,128,000
Fixed selling and administrative expenses
$
1,280,000
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 38,000 units
and sold 32,000 units. The company’s only product is sold for $240 per unit.
The net operating income for the year under super-variable costing is:
A) $912,000
B) $1,248,000
C) $282,000
D) $828,000
Sales ($240 per unit × 32,000 units)
$
7,680,000
unit × 32,000 units)
Contribution margin
4,768,000
Fixed expenses:
Direct labor
$
Fixed manufacturing costs
expense
Net operating income
$
37) Stubenrauch Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials
$
91
Fixed costs per year:
Direct labor
$
532,000
Fixed manufacturing overhead
$
2,128,000
Fixed selling and administrative expenses
$
1,280,000
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 38,000 units
and sold 32,000 units. The company’s only product is sold for $240 per unit.
Assume that the company uses a variable costing system that assigns $14 of direct labor cost to
each unit that is produced. The net operating income under this costing system is:
A) $282,000
B) $912,000
C) $1,248,000
D) $828,000
38) Labadie 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
$
575,000
Fixed manufacturing overhead
$
1,600,000
Fixed selling and administrative expenses
$
748,000
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 25,000 units
and sold 22,000 units. The company’s only product is sold for $251 per unit.
The unit product cost under super-variable costing is:
A) $117 per unit
B) $215 per unit
C) $94 per unit
D) $181 per unit
39) Labadie 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
$
575,000
Fixed manufacturing overhead
$
1,600,000
Fixed selling and administrative expenses
$
748,000
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 25,000 units
and sold 22,000 units. The company’s only product is sold for $251 per unit.
Assume that the company uses a variable costing system that assigns $23 of direct labor cost to
each unit that is produced. The unit product cost under this costing system is:
A) $181 per unit
B) $117 per unit
C) $94 per unit
D) $215 per unit
Direct materials
Direct labor
Variable costing unit product cost
117
40) Labadie 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
$
575,000
Fixed manufacturing overhead
$
1,600,000
Fixed selling and administrative expenses
$
748,000
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 25,000 units
and sold 22,000 units. The company’s only product is sold for $251 per unit.
The company is considering using either super-variable costing or a variable costing system that
assigns $23 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) Super-variable costing net operating income exceeds variable costing net operating income by
$69,000.
B) Variable costing net operating income exceeds super-variable costing net operating income by
$69,000.
C) Super-variable costing net operating income exceeds variable costing net operating income by
$192,000.
D) Variable costing net operating income exceeds super-variable costing net operating income
by $192,000.
41) Schubert Corporation manufactures and sells one product. In the company’s first year of
operations, the variable cost consisted solely of direct materials of $86 per unit. The annual fixed
costs were $510,000 of direct labor cost, $2,210,000 of fixed manufacturing overhead expense,
and $1,209,000 of fixed selling and administrative expense. 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 34,000 units and sold 31,000 units. The
company’s only product is sold for $232 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year
and prepare an income statement for the year.
b. Assume that the company uses a variable costing system that assigns $15 of direct labor cost
to each unit that is produced. Compute the unit product cost for the year and prepare an income
statement for the year.
42) Guillaume Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable cost per unit:
Direct materials
$
97
Fixed costs per year:
Direct labor
$
1,288,000
Fixed manufacturing overhead
$
3,312,000
Fixed selling and administrative expenses
$
1,271,000
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 46,000 units
and sold 41,000 units. The company’s only product is sold for $260 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year
and prepare an income statement for the year.
b. Assume that the company uses a variable costing system that assigns $28 of direct labor cost
to each unit that is produced. Compute the unit product cost for the year and prepare an income
statement for the year.
Sales ($260 per unit × 41,000 units)
41,000 units)
Contribution margin
Fixed expenses:
Direct labor
1,288,000
Fixed manufacturing costs
3,312,000
Fixed selling and administrative expense
1,271,000
Net operating income
43) Nurre Corporation manufactures and sells one product. In the company’s first year of
operations, the variable cost consisted solely of direct materials of $88 per unit. The annual fixed
costs were $729,000 of direct labor cost, $1,917,000 of fixed manufacturing overhead expense,
and $814,000 of fixed selling and administrative expense. 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 27,000 units and sold 22,000 units. The
company’s only product is sold for $247 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year
and prepare an income statement for the year.
b. Assume that the company uses an absorption costing system that assigns $27 of direct labor
cost and $71 of fixed manufacturing overhead to each unit that is produced. Compute the unit
product cost for the year and prepare an income statement for the year.
44) Sawicki Corporation manufactures and sells one product. The following information pertains
to the company’s first year of operations:
Variable cost per unit:
Direct materials
$
93
Fixed costs per year:
Direct labor
$
250,000
Fixed manufacturing overhead
$
1,550,000
Fixed selling and administrative expenses
$
666,000
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 25,000 units
and sold 18,000 units. The company’s only product is sold for $224 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year
and prepare an income statement for the year.
b. Assume that the company uses an absorption costing system that assigns $10 of direct labor
cost and $62 of fixed manufacturing overhead to each unit that is produced. Compute the unit
product cost for the year and prepare an income statement for the year.
Sales ($224 per unit × 18,000 units)
4,032,000
18,000 units)
Contribution margin
2,358,000
Fixed expenses:
Direct labor
$
Fixed manufacturing costs
Fixed selling and administrative expense
2,466,000
Net operating income
)