21
47) Rhea Corporation has provided the following data for its two most recent years of operation:
Selling price per unit
$
67
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials
$
10
Direct labor
$
5
Variable manufacturing overhead
$
3
Fixed manufacturing overhead per year
$
252,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold
$
4
Fixed selling and administrative expense per year
$
65,000
Year 1
Year 2
Units in beginning inventory
0
1,000
Units produced during the year
9,000
7,000
Units sold during the year
8,000
7,000
Units in ending inventory
1,000
1,000
The net operating income (loss) under absorption costing in Year 2 is closest to:
A) $6,000
B) $99,000
C) ($2,000)
D) $71,000
23
48) Homeyer Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit
$
71
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials
$
12
Direct labor
$
6
Variable manufacturing overhead
$
3
Fixed manufacturing overhead per year
$
264,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold
$
4
Fixed selling and administrative expense per year
$
74,000
Year 1
Year 2
Units in beginning inventory
0
3,000
Units produced during the year
11,000
12,000
Units sold during the year
8,000
14,000
Units in ending inventory
3,000
1,000
The net operating income (loss) under absorption costing in Year 1 is closest to:
A) $102,000
B) $30,000
C) $176,000
D) $208,000
49) A manufacturing company that produces a single product has provided the following data
concerning its most recent month of operations:
Units in beginning inventory
0
Units produced
8,900
Units sold
8,500
Units in ending inventory
400
Variable costs per unit:
Direct materials
$
26
Direct labor
$
25
Variable manufacturing overhead
$
4
Variable selling and administrative expense
$
4
Fixed costs:
Fixed manufacturing overhead
$
249,200
Fixed selling and administrative expense
$
17,000
What is the variable costing unit product cost for the month?
A) $59 per unit
B) $83 per unit
C) $87 per unit
D) $55 per unit
Direct materials
Direct labor
Variable manufacturing overhead
Variable costing unit product cost
26
50) Mccrone Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit
$
59
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials
$
11
Direct labor
$
6
Variable manufacturing overhead
$
4
Fixed manufacturing overhead per year
$
88,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold
$
4
Fixed selling and administrative expense per year
$
80,000
Year 1
Year 2
Units in beginning inventory
0
1,000
Units produced during the year
11,000
8,000
Units sold during the year
10,000
5,000
Units in ending inventory
1,000
4,000
The net operating income (loss) under variable costing in Year 1 is closest to:
A) $380,000
B) $340,000
C) $180,000
D) $172,000
51) Kray Inc., which produces a single product, has provided the following data for its most
recent month of operations:
Number of units produced
6,000
Variable costs per unit:
Direct materials
$
40
Direct labor
$
19
Variable manufacturing overhead
$
8
Variable selling and administrative expense
$
2
Fixed costs:
Fixed manufacturing overhead
$
144,000
Fixed selling and administrative expense
$
198,000
There were no beginning or ending inventories. The variable costing unit product cost was:
A) $91 per unit
B) $67 per unit
C) $69 per unit
D) $61 per unit
Direct materials
$
Direct labor
Variable manufacturing overhead
Variable costing unit product cost
$
52) A manufacturing company that produces a single product has provided the following data
concerning its most recent month of operations:
Selling price
$
133
Units in beginning inventory
0
Units produced
7,000
Units sold
6,800
Units in ending inventory
200
Variable costs per unit:
Direct materials
$
41
Direct labor
$
57
Variable manufacturing overhead
$
5
Variable selling and administrative expense
$
4
Fixed costs:
Fixed manufacturing overhead
$
133,000
Fixed selling and administrative expense
$
34,000
What is the total period cost for the month under absorption costing?
A) $61,200
B) $133,000
C) $34,000
D) $194,200
$4.00 per unit × 6,800 units sold
Fixed selling and administrative expense
34,000
Absorption costing total period cost
$
61,200
53) Beamish Inc., which produces a single product, has provided the following data for its most
recent month of operations:
Number of units produced
8,000
Variable costs per unit:
Direct materials
$
37
Direct labor
$
56
Variable manufacturing overhead
$
4
Variable selling and administrative expense
$
2
Fixed costs:
Fixed manufacturing overhead
$
312,000
Fixed selling and administrative expense
$
448,000
There were no beginning or ending inventories. The absorption costing unit product cost was:
A) $93 per unit
B) $97 per unit
C) $136 per unit
D) $194 per unit
Direct materials
$
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead cost ($312,000 ÷ 8,000 units)
Absorption costing unit product cost
$
136
54) A company produces a single product. Variable production costs are $21 per unit and
variable selling and administrative expenses are $4 per unit. Fixed manufacturing overhead totals
$30,000 and fixed selling and administration expenses total $36,000. Assuming a beginning
inventory of zero, production of 6,000 units and sales of 5,600 units, the dollar value of the
ending inventory under variable costing would be:
A) $10,000
B) $8,400
C) $12,000
D) $14,400
55) A manufacturing company that produces a single product has provided the following data
concerning its most recent month of operations:
Units in beginning inventory
0
Units produced
2,900
Units sold
2,600
Units in ending inventory
300
Variable costs per unit:
Direct materials
$
49
Direct labor
$
58
Variable manufacturing overhead
$
6
Variable selling and administrative expense
$
11
Fixed costs:
Fixed manufacturing overhead
$
55,100
Fixed selling and administrative expense
$
18,200
What is the absorption costing unit product cost for the month?
A) $124 per unit
B) $132 per unit
C) $113 per unit
D) $143 per unit
Direct materials
$
49
Direct labor
58
Variable manufacturing overhead
Fixed manufacturing overhead cost ($55,100 ÷ 2,900 units)
19
Absorption costing unit product cost
$
132
56) Foggs Corporation has provided the following data for its two most recent years of
operation:
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials
$
10
Direct labor
$
6
Variable manufacturing overhead
$
5
Fixed manufacturing overhead per year
$
520,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold
$
6
Fixed selling and administrative expense per year
$
63,000
Year 1
Year 2
Units in beginning inventory
0
1,000
Units produced during the year
10,000
13,000
Units sold during the year
9,000
11,000
Units in ending inventory
1,000
3,000
The unit product cost under absorption costing in Year 2 is closest to:
A) $40.00
B) $21.00
C) $67.00
D) $61.00
Direct materials
$
Direct labor
Variable manufacturing overhead
($520,000 ÷ 13,000 units produced)
Absorption costing unit product cost
$
57) Shun Corporation manufactures and sells a hand held calculator. The following information
relates to Shun’s operations for last year:
Unit product cost under variable costing
$
5.20
per unit
Fixed manufacturing overhead cost for the year
$
260,000
Fixed selling and administrative expense for the year
$
180,000
Units (calculators) produced and sold
400,000
What is Shun’s absorption costing unit product cost for last year?
A) $4.10 per unit
B) $4.55 per unit
C) $5.85 per unit
D) $6.30 per unit
Unit product cost under variable costing
$
5.20
per unit
($260,000 ÷ 400,000 units)
Absorption costing unit product cost
$
5.85
per unit
35
58) Badoni Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit
$
85
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials
$
10
Direct labor
$
6
Variable manufacturing overhead
$
4
Fixed manufacturing overhead per year
$
96,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold
$
5
Fixed selling and administrative expense per year
$
77,000
Year 1
Year 2
Units in beginning inventory
0
1,000
Units produced during the year
8,000
6,000
Units sold during the year
7,000
3,000
Units in ending inventory
1,000
4,000
The net operating income (loss) under variable costing in Year 2 is closest to:
A) $180,000
B) $195,000
C) $59,000
D) $7,000
59) Bitonti Corporation has provided the following data for its most recent year of operation:
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials
$
9
Direct labor
$
7
Variable manufacturing overhead
$
5
Fixed manufacturing overhead per year
$
156,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold
$
5
Fixed selling and administrative expense per year
$
81,000
Units in beginning inventory
0
Units produced during the year
12,000
Units sold during the year
11,000
Units in ending inventory
1,000
The unit product cost under absorption costing is closest to:
A) $34.00
B) $21.00
C) $13.00
D) $39.00
Direct materials
$
9
Direct labor
7
Variable manufacturing overhead
5
($156,000 ÷ 12,000 units produced)
Absorption costing unit product cost
$
34
60) Stoneberger Corporation produces a single product and has the following cost structure:
Number of units produced each year
4,000
Variable costs per unit:
Direct materials
$
50
Direct labor
$
72
Variable manufacturing overhead
$
6
Variable selling and administrative expense
$
3
Fixed costs per year:
Fixed manufacturing overhead
$
296,000
Fixed selling and administrative expense
$
76,000
The variable costing unit product cost is:
A) $128 per unit
B) $125 per unit
C) $202 per unit
D) $131 per unit
Direct materials
$
50
Direct labor
72
Variable manufacturing overhead
6
Variable costing unit product cost
$
128
61) Silver Corporation produces a single product. Last year, the company’s variable production
costs totaled $7,500 and its fixed manufacturing overhead costs totaled $4,500. The company
produced 3,000 units during the year and sold 2,400 units. There were no units in the beginning
inventory. Which of the following statements is true?
A) Under variable costing, the units in the ending inventory will be costed at $4.00 each.
B) The net operating income under absorption costing for the year will be $900 lower than the
net operating income under variable costing.
C) The ending inventory under variable costing will be $900 lower than the ending inventory
under absorption costing.
D) Under absorption costing, the units in ending inventory will be costed at $2.50 each.
40
62) Kaaua Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit
$
83
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials
$
13
Direct labor
$
7
Variable manufacturing overhead
$
4
Fixed manufacturing overhead per year
$
396,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold
$
4
Fixed selling and administrative expense per year
$
72,000
Year 1
Year 2
Units in beginning inventory
0
2,000
Units produced during the year
12,000
11,000
Units sold during the year
10,000
9,000
Units in ending inventory
2,000
4,000
Which of the following statements is true for Year 2?
A) The amount of fixed manufacturing overhead deferred in inventories is $534,000
B) The amount of fixed manufacturing overhead released from inventories is $78,000
C) The amount of fixed manufacturing overhead released from inventories is $534,000
D) The amount of fixed manufacturing overhead deferred in inventories is $78,000