101
108) Columbia Corporation produces a single product. The company’s variable costing income
statement for November appears below:
Columbia Corporation
Income Statement
For the Month ended November 30
Sales ($30 per unit)
$
1,200,000
Variable expenses:
Variable cost of goods sold
720,000
Variable selling expense
160,000
Total variable expenses
880,000
Contribution margin
320,000
Fixed expenses:
Manufacturing
140,000
Selling and administrative
35,000
Total fixed expenses
175,000
Net operating income
$
145,000
During November, 35,000 units were manufactured and 8,000 units were in beginning
inventory. Variable production costs have remained constant on a per unit basis over the past
several months.
Under absorption costing, for November the company would report a:
A) $145,000 profit
B) $125,000 profit
C) $125,000 loss
D) $120,000 profit
103
109) Aaron Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price
$
90
Units in beginning inventory
0
Units produced
3,400
Units sold
3,000
Units in ending inventory
400
Variable costs per unit:
Direct materials
$
21
Direct labor
$
38
Variable manufacturing overhead
$
6
Variable selling and administrative expense
$
4
Fixed costs:
Fixed manufacturing overhead
$
54,400
Fixed selling and administrative expense
$
3,000
What is the unit product cost for the month under variable costing?
A) $69 per unit
B) $65 per unit
C) $85 per unit
D) $81 per unit
110) Aaron Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price
$
90
Units in beginning inventory
0
Units produced
3,400
Units sold
3,000
Units in ending inventory
400
Variable costs per unit:
Direct materials
$
21
Direct labor
$
38
Variable manufacturing overhead
$
6
Variable selling and administrative expense
$
4
Fixed costs:
Fixed manufacturing overhead
$
54,400
Fixed selling and administrative expense
$
3,000
What is the unit product cost for the month under absorption costing?
A) $81 per unit
B) $65 per unit
C) $85 per unit
D) $69 per unit
Direct materials
21
Direct labor
38
Variable manufacturing overhead
6
produced)
16
Absorption costing unit product cost
81
106
111) Aaron Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price
$
90
Units in beginning inventory
0
Units produced
3,400
Units sold
3,000
Units in ending inventory
400
Variable costs per unit:
Direct materials
$
21
Direct labor
$
38
Variable manufacturing overhead
$
6
Variable selling and administrative expense
$
4
Fixed costs:
Fixed manufacturing overhead
$
54,400
Fixed selling and administrative expense
$
3,000
The total contribution margin for the month under variable costing is:
A) $27,000
B) $63,000
C) $8,600
D) $75,000
108
112) Aaron Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price
$
90
Units in beginning inventory
0
Units produced
3,400
Units sold
3,000
Units in ending inventory
400
Variable costs per unit:
Direct materials
$
21
Direct labor
$
38
Variable manufacturing overhead
$
6
Variable selling and administrative expense
$
4
Fixed costs:
Fixed manufacturing overhead
$
54,400
Fixed selling and administrative expense
$
3,000
The total gross margin for the month under the absorption costing approach is:
A) $12,000
B) $59,400
C) $63,000
D) $27,000
113) Aaron Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price
$
90
Units in beginning inventory
0
Units produced
3,400
Units sold
3,000
Units in ending inventory
400
Variable costs per unit:
Direct materials
$
21
Direct labor
$
38
Variable manufacturing overhead
$
6
Variable selling and administrative expense
$
4
Fixed costs:
Fixed manufacturing overhead
$
54,400
Fixed selling and administrative expense
$
3,000
What is the total period cost for the month under variable costing?
A) $54,400
B) $69,400
C) $57,400
D) $15,000
units)
12,000
Fixed manufacturing overhead
54,400
Fixed selling and administrative expense
3,000
Total period cost variable costing
69,400
114) Aaron Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price
$
90
Units in beginning inventory
0
Units produced
3,400
Units sold
3,000
Units in ending inventory
400
Variable costs per unit:
Direct materials
$
21
Direct labor
$
38
Variable manufacturing overhead
$
6
Variable selling and administrative expense
$
4
Fixed costs:
Fixed manufacturing overhead
$
54,400
Fixed selling and administrative expense
$
3,000
What is the total period cost for the month under the absorption costing?
A) $54,400
B) $3,000
C) $69,400
D) $15,000
Variable selling and administrative
($4 per unit × 3,000 units)
12,000
Fixed selling and administrative expense
3,000
Total period cost under absorption costing
15,000
112
115) Aaron Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price
$
90
Units in beginning inventory
0
Units produced
3,400
Units sold
3,000
Units in ending inventory
400
Variable costs per unit:
Direct materials
$
21
Direct labor
$
38
Variable manufacturing overhead
$
6
Variable selling and administrative expense
$
4
Fixed costs:
Fixed manufacturing overhead
$
54,400
Fixed selling and administrative expense
$
3,000
What is the net operating income for the month under variable costing?
A) $12,000
B) $(20,400)
C) $5,600
D) $6,400
114
116) Aaron Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price
$
90
Units in beginning inventory
0
Units produced
3,400
Units sold
3,000
Units in ending inventory
400
Variable costs per unit:
Direct materials
$
21
Direct labor
$
38
Variable manufacturing overhead
$
6
Variable selling and administrative expense
$
4
Fixed costs:
Fixed manufacturing overhead
$
54,400
Fixed selling and administrative expense
$
3,000
What is the net operating income for the month under absorption costing?
A) $6,400
B) $12,000
C) $5,600
D) $(20,400)
116
117) Gabuat Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price
$
106
Units in beginning inventory
0
Units produced
2,600
Units sold
2,200
Units in ending inventory
400
Variable costs per unit:
Direct materials
$
46
Direct labor
$
28
Variable manufacturing overhead
$
2
Variable selling and administrative expense
$
7
Fixed costs:
Fixed manufacturing overhead
$
33,800
Fixed selling and administrative expense
$
8,800
The total contribution margin for the month under variable costing is:
A) $16,800
B) $37,400
C) $50,600
D) $66,000
118
118) Gabuat Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price
$
106
Units in beginning inventory
0
Units produced
2,600
Units sold
2,200
Units in ending inventory
400
Variable costs per unit:
Direct materials
$
46
Direct labor
$
28
Variable manufacturing overhead
$
2
Variable selling and administrative expense
$
7
Fixed costs:
Fixed manufacturing overhead
$
33,800
Fixed selling and administrative expense
$
8,800
The total gross margin for the month under the absorption costing approach is:
A) $73,000
B) $37,400
C) $13,200
D) $50,600
120
119) Gabuat Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price
$
106
Units in beginning inventory
0
Units produced
2,600
Units sold
2,200
Units in ending inventory
400
Variable costs per unit:
Direct materials
$
46
Direct labor
$
28
Variable manufacturing overhead
$
2
Variable selling and administrative expense
$
7
Fixed costs:
Fixed manufacturing overhead
$
33,800
Fixed selling and administrative expense
$
8,800
What is the total period cost for the month under variable costing?
A) $42,600
B) $33,800
C) $24,200
D) $58,000