130. Yankee Corporation manufactures a single product. The company has the following cost
structure:
Variable costs per unit:
Production $4
Selling and administrative $1
Fixed costs in total:
Production $12,000
Selling and administrative $8,000
Last year, 4,000 units were produced and 3,500 units were sold. There were no beginning
inventories.
Under variable costing, the unit product cost would be:
131. Yankee Corporation manufactures a single product. The company has the following cost
structure:
Variable costs per unit:
Production $4
Selling and administrative $1
Fixed costs in total:
Production $12,000
Selling and administrative $8,000
Last year, 4,000 units were produced and 3,500 units were sold. There were no beginning
inventories.
The carrying value on the balance sheet of the ending finished goods inventory under variable
costing would be:
132. Yankee Corporation manufactures a single product. The company has the following cost
structure:
Variable costs per unit:
Production $4
Selling and administrative $1
Fixed costs in total:
Production $12,000
Selling and administrative $8,000
Last year, 4,000 units were produced and 3,500 units were sold. There were no beginning
inventories.
Under absorption costing, the cost of goods sold for the year would be:
133. Cutterski Corporation manufactures a propeller. Shown below is Cutterski’s cost
structure:
Variable cost per propeller Total fixed cost for the year
Manufacturing cost $114 $810,000
Selling and administrative expense $20 $243,000
In its first year of operations, Cutterski produced 60,000 propellers but only sold 54,000.
What is the total cost that would be assigned to Cutterski’s finished goods inventory at the end
of the first year of operations under variable costing?
134. Cutterski Corporation manufactures a propeller. Shown below is Cutterski’s cost
structure:
Variable cost per propeller Total fixed cost for
the year
Manufacturing cost $114 $810,000
Selling and administrative expense $20 $243,000
In its first year of operations, Cutterski produced 60,000 propellers but only sold 54,000.
What would Cutterski report as its cost of goods sold under absorption costing?
135. Cutterski Corporation manufactures a propeller. Shown below is Cutterski’s cost
structure:
Variable cost per propeller Total fixed cost for the year
Manufacturing cost $114 $810,000
Selling and administrative expense $20 $243,000
In its first year of operations, Cutterski produced 60,000 propellers but only sold 54,000.
Which costing method (variable or absorption) will generate a higher net operating income in
Cutterski’s first year of operations and by how much?
136. Harris Corporation produces a single product. Last year, Harris manufactured 17,000
units and sold 13,000 units. Production costs for the year were as follows:
Direct materials $153,000
Direct labor $110,500
Variable manufacturing overhead $204,000
Fixed manufacturing overhead $255,000
Sales were $780,000 for the year, variable selling and administrative expenses were $88,400, and
fixed selling and administrative expenses were $170,000. There was no beginning inventory.
Assume that direct labor is a variable cost.
The contribution margin per unit was:
137. Harris Corporation produces a single product. Last year, Harris manufactured 17,000
units and sold 13,000 units. Production costs for the year were as follows:
Direct materials $153,000
Direct labor $110,500
Variable manufacturing overhead $204,000
Fixed manufacturing overhead $255,000
Sales were $780,000 for the year, variable selling and administrative expenses were $88,400, and
fixed selling and administrative expenses were $170,000. There was no beginning inventory.
Assume that direct labor is a variable cost.
Under absorption costing, the ending inventory for the year would be valued at:
138. Harris Corporation produces a single product. Last year, Harris manufactured 17,000
units and sold 13,000 units. Production costs for the year were as follows:
Direct materials $153,000
Direct labor $110,500
Variable manufacturing overhead $204,000
Fixed manufacturing overhead $255,000
Sales were $780,000 for the year, variable selling and administrative expenses were $88,400, and
fixed selling and administrative expenses were $170,000. There was no beginning inventory.
Assume that direct labor is a variable cost.
Under variable costing, the company’s net operating income for the year would be:
139. Crossbow Corp. produces a single product. Data concerning June’s operations follow:
Units in beginning inventory 0
Units produced 6,000
Units sold 5,000
Variable costs per unit:
Manufacturing $7
Selling and administrative $3
Fixed costs in total:
Manufacturing $12,000
Selling and administrative $3,000
Under variable costing, ending inventory on the balance sheet would be valued at:
140. Crossbow Corp. produces a single product. Data concerning June’s operations follow:
Units in beginning inventory 0
Units produced 6,000
Units sold 5,000
Variable costs per unit:
Manufacturing $7
Selling and administrative $3
Fixed costs in total:
Manufacturing $12,000
Selling and administrative $3,000
Under absorption costing, ending inventory on the balance sheet would be valued at:
141. Crossbow Corp. produces a single product. Data concerning June’s operations follow:
Units in beginning inventory 0
Units produced 6,000
Units sold 5,000
Variable costs per unit:
Manufacturing $7
Selling and administrative $3
Fixed costs in total:
Manufacturing $12,000
Selling and administrative $3,000
For the year in question, net operating income under variable costing will be:
142. During its first year of operations, Carlos Manufacturing Corporation incurred the
following costs to produce 8,000 units of its only product:
Direct materials $7 per unit
Direct labor $3 per unit
Variable manufacturing overhead $18 per unit
Fixed manufacturing overhead $450,000 in total
The company also incurred the following costs in selling 7,500 units of product during its first
year:
Variable selling and administrative $2 per unit
Fixed selling and administrative $60,000 in total
Assume that direct labor is a variable cost.
Under absorption costing, what is the total cost that would be assigned to Carlos’ finished goods
inventory at the end of the first year of operations?
143. During its first year of operations, Carlos Manufacturing Corporation incurred the
following costs to produce 8,000 units of its only product:
Direct materials $7 per unit
Direct labor $3 per unit
Variable manufacturing overhead $18 per unit
Fixed manufacturing overhead $450,000 in total
The company also incurred the following costs in selling 7,500 units of product during its first
year:
Variable selling and administrative $2 per unit
Fixed selling and administrative $60,000 in total
Assume that direct labor is a variable cost.
Under variable costing, what is the total cost that would be assigned to Carlos’ finished goods
inventory at the end of the first year of operations?