251) Neelon Corporation has two divisions: Southern Division and Northern Division. The
following data are for the most recent operating period:
Total
Company
Southern
Division
Northern
Division
Sales
$
418,000
$
193,000
$
225,000
Variable expenses
$
130,880
$
79,130
$
51,750
Traceable fixed expenses
$
186,000
$
77,000
$
109,000
Common fixed expense
$
79,420
$
36,670
$
42,750
The common fixed expenses have been allocated to the divisions on the basis of sales.
What is the company’s overall net operating income if it operates at the break-even points for its
two divisions?
A) $(79,420)
B) $21,700
C) $(265,420)
D) $0
252) Vancott Inc., which produces a single product, has provided the following data for its most
recent month of operation:
Number of units produced
6,000
Variable costs per unit:
Direct materials
$
93
Direct labor
$
58
Variable manufacturing overhead
$
1
Variable selling and administrative expenses
$
1
Fixed costs:
Fixed manufacturing overhead
$
192,000
Fixed selling and administrative expenses
$
348,000
The company had no beginning or ending inventories.
Required:
Compute the unit product cost under absorption costing. Show your work!
Direct materials
Direct labor
Variable manufacturing overhead
($192,000 ÷ 6,000 units)
Unit product cost
253) Quates Corporation produces a single product and has the following cost structure:
Number of units produced each year
3,000
Variable costs per unit:
Direct materials
$
27
Direct labor
$
96
Variable manufacturing overhead
$
1
Variable selling and administrative expenses
$
4
Fixed costs:
Fixed manufacturing overhead
$
219,000
Fixed selling and administrative expenses
$
153,000
Required:
Compute the unit product cost under absorption costing. Show your work!
Direct materials
Direct labor
Variable manufacturing overhead
($219,000 ÷ 3,000 units)
Unit product cost
254) Boylston Corporation has provided the following data for its two most recent years of
operation. The company makes a product that it sells for $75 per unit. It began Year 1 with no units
in beginning inventory.
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials
$13
Direct labor
$6
Variable manufacturing overhead
$4
Fixed manufacturing overhead per year
$112,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold
$5
Fixed selling and administrative expense per year
$71,000
Year 1
Year 2
Units produced during the year
8,000
7,000
Units sold during the year
7,000
4,000
Units in ending inventory
1,000
4,000
Required:
a. Assume the company uses absorption costing. Compute the unit product cost in each year.
b. Assume the company uses variable costing. Compute the unit product cost in each year.
c. Assume the company uses absorption costing. Prepare an income statement for each year.
d. Assume the company uses variable costing. Prepare an income statement for each year.
Year 1
Year 2
Direct materials
Direct labor
Variable manufacturing overhead
Absorption costing unit product cost
Year 1
Year 2
Direct materials
Direct labor
Variable manufacturing overhead
Variable costing unit product cost
255) Masley Corporation has provided the following data for its two most recent years of
operation:
Variable manufacturing cost per unit produced:
Direct materials
$13
Direct labor
$6
Variable manufacturing overhead
$4
Fixed manufacturing overhead per year
$140,000
In Year 1, 10,000 units were produced and in Year 2, 7,000 units were produced.
Required:
a. Assume the company uses absorption costing. Compute the unit product cost in each year.
B. Assume the company uses variable costing. Compute the unit product cost in each year.
Direct materials
Direct labor
Variable manufacturing overhead
produced)
Absorption costing unit product cost
Year 1
Year 2
Direct materials
Direct labor
Variable manufacturing overhead
Variable costing unit product cost
307
256) Murphy Inc., which produces a single product, has provided the following data for its most
recent month of operation:
Number of units produced
7,000
Variable costs per unit:
Direct materials
$
37
Direct labor
$
43
Variable manufacturing overhead
$
5
Variable selling and administrative expenses
$
1
Fixed costs:
Fixed manufacturing overhead
$
84,000
Fixed selling and administrative expenses
$
119,000
The company had no beginning or ending inventories.
Required:
a. Compute the unit product cost under absorption costing.
b. Compute the unit product cost under variable costing.
309
257) Else 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
$7
Variable manufacturing overhead
$3
Fixed manufacturing overhead per year
$216,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold
$6
Fixed selling and administrative expense per year
$72,000
Year 1
Year 2
Units in beginning inventory
0
1,000
Units produced during the year
9,000
12,000
Units sold during the year
8,000
9,000
Units in ending inventory
1,000
4,000
Required:
a. Assume the company uses absorption costing. Compute the unit product cost in each year.
b. Assume the company uses variable costing. Compute the unit product cost in each year.
258) Olguin 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
$
15
Direct labor
$
13
Variable manufacturing overhead
$
7
Variable selling and administrative expenses
$
5
Fixed costs:
Fixed manufacturing overhead
$
328,000
Fixed selling and administrative expenses
$
324,000
Required:
a. Compute the unit product cost under absorption costing.
b. Compute the unit product cost under variable costing.
Direct materials
Direct labor
Variable manufacturing overhead
($328,000 ÷ 4,000 units)
Unit product cost
259) Davitt Corporation produces a single product and has the following cost structure:
Number of units produced each year
1,000
Variable costs per unit:
Direct materials
$
57
Direct labor
$
20
Variable manufacturing overhead
$
2
Variable selling and administrative expenses
$
3
Fixed costs:
Fixed manufacturing overhead
$
88,000
Fixed selling and administrative expenses
$
24,000
Required:
Compute the unit product cost under variable costing.
Direct materials
Direct labor
Variable manufacturing overhead
Unit product cost
314
260) Cadavieco Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit
$90
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials
$13
Direct labor
$6
Variable manufacturing overhead
$4
Fixed manufacturing overhead per year
$224,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold
$5
Fixed selling and administrative expense per year
$74,000
Year 1
Year 2
Units in beginning inventory
0
1,000
Units produced during the year
8,000
7,000
Units sold during the year
7,000
5,000
Units in ending inventory
1,000
3,000
Required:
a. Assume the company uses absorption costing. Compute the unit product cost in each year.
b. Assume the company uses absorption costing. Prepare an income statement for each year.
c. Assume the company uses variable costing. Compute the unit product cost in each year.
d. Assume the company uses variable costing. Prepare an income statement for each year.
261) Schlenz Inc., which produces a single product, has provided the following data for its most
recent month of operation:
Number of units produced
6,000
Variable costs per unit:
Direct materials
$
12
Direct labor
$
34
Variable manufacturing overhead
$
4
Variable selling and administrative expenses
$
2
Fixed costs:
Fixed manufacturing overhead
$
486,000
Fixed selling and administrative expenses
$
522,000
The company had no beginning or ending inventories.
Required:
Compute the unit product cost under variable costing.
Direct materials
Direct labor
Variable manufacturing overhead
Unit product cost
318
262) Ober Corporation, which has only one product, has provided the following data concerning
its most recent month of operations:
Selling price
$
120
Units in beginning inventory
0
Units produced
8,900
Units sold
8,400
Units in ending inventory
500
Variable costs per unit:
Direct materials
$
38
Direct labor
$
36
Variable manufacturing overhead
$
6
Variable selling and administrative expense
$
9
Fixed costs:
Fixed manufacturing overhead
$
151,300
Fixed selling and administrative expense
$
109,200
Required:
a. Prepare a contribution format income statement for the month using variable costing.
b. Prepare an income statement for the month using absorption costing.
