42
63) Simila Corporation has provided the following data for its most recent year of operation:
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials
$
11
Direct labor
$
7
Variable manufacturing overhead
$
5
Fixed manufacturing overhead per year
$
308,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold
$
5
Fixed selling and administrative expense per year
$
81,000
0
11,000
9,000
2,000
Which of the following statements is true?
A) The amount of fixed manufacturing overhead released from inventories is $459,000
B) The amount of fixed manufacturing overhead deferred in inventories is $56,000
C) The amount of fixed manufacturing overhead released from inventories is $56,000
D) The amount of fixed manufacturing overhead deferred in inventories is $459,000
44
64) A manufacturing company that produces a single product has provided the following data
concerning its most recent month of operations:
Selling price
$
130
Units in beginning inventory
0
Units produced
2,100
Units sold
1,900
Units in ending inventory
200
Variable costs per unit:
Direct materials
$
41
Direct labor
$
39
Variable manufacturing overhead
$
4
Variable selling and administrative expense
$
11
Fixed costs:
Fixed manufacturing overhead
$
52,500
Fixed selling and administrative expense
$
3,800
What is the net operating income for the month under variable costing?
A) $15,200
B) $(6,600)
C) $10,200
D) $5,000
46
65) A manufacturing company that produces a single product has provided the following data
concerning its most recent month of operations:
Selling price
$
117
Units in beginning inventory
0
Units produced
2,900
Units sold
2,500
Units in ending inventory
400
Variable costs per unit:
Direct materials
$
32
Direct labor
$
45
Variable manufacturing overhead
$
2
Variable selling and administrative expense
$
9
Fixed costs:
Fixed manufacturing overhead
$
43,500
Fixed selling and administrative expense
$
15,000
The total gross margin for the month under absorption costing is:
A) $72,500
B) $95,100
C) $20,000
D) $57,500
48
66) The following data pertain to last year’s operations at Clarkson, Incorporated, a company that
produces a single product:
Units in beginning inventory
0
Units produced
100,000
Units sold
98,000
Selling price per unit
$
10.00
Variable costs per unit:
Direct materials
$
1.50
Direct labor
$
2.50
Variable manufacturing overhead
$
1.00
Variable selling and administrative expense
$
2.00
Fixed expenses per year:
Fixed manufacturing overhead
$
200,000
Fixed selling and administrative expense
$
50,000
What was the absorption costing net operating income last year?
A) $44,000
B) $48,000
C) $50,000
D) $49,000
50
67) A manufacturing company that produces a single product has provided the following data
concerning its most recent month of operations:
Selling price
$
88
Units in beginning inventory
0
Units produced
5,200
Units sold
4,900
Units in ending inventory
300
Variable costs per unit:
Direct materials
$
12
Direct labor
$
23
Variable manufacturing overhead
$
2
Variable selling and administrative expense
$
5
Fixed costs:
Fixed manufacturing overhead
$
161,200
Fixed selling and administrative expense
$
63,700
The total contribution margin for the month under variable costing is:
A) $64,200
B) $249,900
C) $225,400
D) $98,000
52
68) A manufacturing company that produces a single product has provided the following data
concerning its most recent month of operations:
Selling price
$
134
Units in beginning inventory
0
Units produced
7,600
Units sold
7,300
Units in ending inventory
300
Variable costs per unit:
Direct materials
$
49
Direct labor
$
52
Variable manufacturing overhead
$
6
Variable selling and administrative expense
$
11
Fixed costs:
Fixed manufacturing overhead
$
68,400
Fixed selling and administrative expense
$
36,500
What is the net operating income for the month under absorption costing?
A) $11,900
B) $(20,200)
C) $14,600
D) $2,700
69) Bellue Inc. manufactures a single product. Variable costing net operating income was
$96,300 last year and its inventory decreased by 2,600 units. Fixed manufacturing overhead cost
was $1 per unit for both units in beginning and in ending inventory. What was the absorption
costing net operating income last year?
A) $2,600
B) $93,700
C) $96,300
D) $98,900
70) A company that produces a single product had a net operating income of $65,000 using
variable costing and a net operating income of $95,000 using absorption costing. Total fixed
manufacturing overhead was $60,000 and production was 10,000 units. This year was the first
year of operations. Between the beginning and the end of the year, the inventory level:
A) decreased by 5,000 units
B) increased by 5,000 units
C) decreased by 30,000 units
D) increased by 30,000 units
56
71) Croft Corporation produces a single product. Last year, the company had a net operating
income of $160,000 using absorption costing and $149,000 using variable costing. The fixed
manufacturing overhead cost was $10 per unit. There were no beginning inventories. If 43,000
units were produced last year, then sales last year were:
A) 32,000 units
B) 40,000 units
C) 41,900 units
D) 54,000 units
72) Pungent Corporation manufactures and sells a spice rack. Shown below are the actual
operating results for the first two years of operations:
Year 1
Year 2
Units (spice racks) produced
40,000
40,000
Units (spice racks) sold
37,000
41,000
Absorption costing net operating income
$
44,000
$
52,000
Variable costing net operating income
$
38,000
???
Pungent’s selling price and unit variable cost and total fixed cost were the same for both years.
What is Pungent’s variable costing net operating income for Year 2?
A) $48,000
B) $50,000
C) $54,000
D) $56,000
Variable costing net operating income
$
38,000
absorption costing
Absorption costing net operating income
$
73) Last year, Kirsten Corporation’s variable costing net operating income was $63,400. Fixed
manufacturing overhead costs released from inventory under absorption costing amounted to
$10,700. What was the absorption costing net operating income last year?
A) $10,700
B) $74,100
C) $63,400
D) $52,700