122
120) 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
$
Direct labor
$
Variable manufacturing overhead
$
Variable selling and administrative expense
$
Fixed costs:
Fixed manufacturing overhead
$
Fixed selling and administrative expense
$
What is the total period cost for the month under the absorption costing?
A) $24,200
B) $8,800
C) $58,000
D) $33,800
121) Erie Corporation manufactures a single product that it sells for $35 per unit. The company has
the following cost structure:
Variable costs per unit:
Production
$
8
Selling and administrative
$
5
Fixed costs per year:
Production
$
82,500
Selling and administrative
$
60,000
There were no units in inventory at the beginning of the year. During the year 30,000 units were
produced and 25,000 units were sold.
Under absorption costing, the unit product cost would be:
A) $8.00 per unit
B) $17.75 per unit
C) $13.00 per unit
D) $10.75 per unit
Variable manufacturing
$
Fixed manufacturing overhead cost ($82,500 ÷ 30,000 units)
Absorption costing unit product cost
$
10.75
122) Erie Corporation manufactures a single product that it sells for $35 per unit. The company has
the following cost structure:
Variable costs per unit:
Production
$
8
Selling and administrative
$
5
Fixed costs per year:
Production
$
82,500
Selling and administrative
$
60,000
There were no units in inventory at the beginning of the year. During the year 30,000 units were
produced and 25,000 units were sold.
The company’s net operating income under variable costing would be:
A) $407,500
B) $421,250
C) $431,250
D) $417,500
Sales ($35 per unit × 25,000 units)
Variable expenses:
Variable cost of goods sold
($8 per unit × 25,000 units)
$
200,000
Variable selling and administrative
($5 per unit × 25,000 units)
125,000
Contribution margin
Fixed expenses:
Fixed manufacturing overhead
Fixed selling and administrative expense
Net operating income
123) Hadley Corporation, which has only one product, has provided the following data concerning
its most recent month of operations:
Selling price
$
126
Units in beginning inventory
0
Units produced
1,900
Units sold
1,800
Units in ending inventory
100
Variable costs per unit:
Direct materials
$
Direct labor
$
Variable manufacturing overhead
$
Variable selling and administrative expense
$
Fixed costs:
Fixed manufacturing overhead
$
Fixed selling and administrative expense
$
What is the unit product cost for the month under variable costing?
A) $99 per unit
B) $110 per unit
C) $82 per unit
D) $93 per unit
Direct materials
$
49
Direct labor
28
Variable manufacturing overhead
Variable costing unit product cost
$
82
127
124) Hadley Corporation, which has only one product, has provided the following data concerning
its most recent month of operations:
Selling price
$
126
Units in beginning inventory
0
Units produced
1,900
Units sold
1,800
Units in ending inventory
100
Variable costs per unit:
Direct materials
$
Direct labor
$
Variable manufacturing overhead
$
Variable selling and administrative expense
$
Fixed costs:
Fixed manufacturing overhead
$
Fixed selling and administrative expense
$
The total contribution margin for the month under variable costing is:
A) $27,100
B) $59,400
C) $48,600
D) $79,200
125) Hadley Corporation, which has only one product, has provided the following data concerning
its most recent month of operations:
Selling price
$
126
Units in beginning inventory
0
Units produced
1,900
Units sold
1,800
Units in ending inventory
100
Variable costs per unit:
Direct materials
$
Direct labor
$
Variable manufacturing overhead
$
Variable selling and administrative expense
$
Fixed costs:
Fixed manufacturing overhead
$
Fixed selling and administrative expense
$
What is the total period cost for the month under variable costing?
A) $75,500
B) $43,200
C) $55,700
D) $32,300
units)
$
19,800
Fixed manufacturing overhead
32,300
Fixed selling and administrative expense
23,400
Total
$
75,500
130
126) Hadley Corporation, which has only one product, has provided the following data concerning
its most recent month of operations:
Selling price
$
126
Units in beginning inventory
0
Units produced
1,900
Units sold
1,800
Units in ending inventory
100
Variable costs per unit:
Direct materials
$
Direct labor
$
Variable manufacturing overhead
$
Variable selling and administrative expense
$
Fixed costs:
Fixed manufacturing overhead
$
Fixed selling and administrative expense
$
What is the net operating income for the month under variable costing?
A) $5,400
B) $1,700
C) $(4,500)
D) $3,700
127) Ing Corporation, which has only one product, has provided the following data concerning its
most recent month of operations:
Selling price
$
159
Units in beginning inventory
0
Units produced
7,800
Units sold
7,700
Units in ending inventory
100
Variable costs per unit:
Direct materials
$
47
Direct labor
$
50
Variable manufacturing overhead
$
2
Variable selling and administrative expense
$
9
Fixed costs:
Fixed manufacturing overhead
$
304,200
Fixed selling and administrative expense
$
84,700
What is the unit product cost for the month under variable costing?
A) $99 per unit
B) $138 per unit
C) $108 per unit
D) $147 per unit
Direct materials
$
47
Direct labor
50
Variable manufacturing overhead
2
Variable costing unit product cost
$
99
133
128) Hadley Corporation, which has only one product, has provided the following data concerning
its most recent month of operations:
Selling price
$
159
Units in beginning inventory
0
Units produced
7,800
Units sold
7,700
Units in ending inventory
100
Variable costs per unit:
Direct materials
$
47
Direct labor
$
50
Variable manufacturing overhead
$
2
Variable selling and administrative expense
$
9
Fixed costs:
Fixed manufacturing overhead
$
304,200
Fixed selling and administrative expense
$
84,700
What is the net operating income for the month under variable costing?
A) $3,800
B) $(6,100)
C) $3,900
D) $7,700
135
129) Beach Corporation, which produces a single product, budgeted the following costs for its first
year of operations. These costs are based on a budgeted volume of 30,000 towels produced and
sold:
Direct materials
$
96,000
Direct labor
$
48,000
Variable manufacturing overhead
$
72,000
Fixed manufacturing overhead
$
60,000
Variable selling and administrative expenses
$
12,000
Fixed selling and administrative expenses
$
36,000
During the first year of operations, Beach Corporation actually produced 30,000 towels but only
sold 24,000 towels. Actual costs did not fluctuate from the cost behavior patterns described above.
The 24,000 towels were sold for $16 per towel. Assume that direct labor is a variable cost.
What is the total cost that would be assigned to Beach Corporation’s finished goods inventory at
the end of the first year of operations Under variable costing?
A) $43,200
B) $45,600
C) $55,200
D) $64,800
137
130) Beach Corporation, which produces a single product, budgeted the following costs for its first
year of operations. These costs are based on a budgeted volume of 30,000 towels produced and
sold:
Direct materials
$
96,000
Direct labor
$
48,000
Variable manufacturing overhead
$
72,000
Fixed manufacturing overhead
$
60,000
Variable selling and administrative expenses
$
12,000
Fixed selling and administrative expenses
$
36,000
During the first year of operations, Beach Corporation actually produced 30,000 towels but only
sold 24,000 towels. Actual costs did not fluctuate from the cost behavior patterns described above.
The 24,000 towels were sold for $16 per towel. Assume that direct labor is a variable cost.
Under absorption costing, what is Beach Corporation’s actual net operating income for its first
year?
A) $60,000
B) $115,200
C) $117,600
D) $124,800
131) Elbrege Corporation manufactures a single product. The company has supplied the following
data:
Selling price per unit
$
30
Variable costs per unit:
Production
$
7
Selling and administrative
$
4
Fixed costs per year:
Production
$
75,000
Selling and administrative
$
50,000
There was no beginning inventory. During the year 25,000 units were produced and 20,000 units
were sold.
Under absorption costing, the unit product cost would be:
A) $7 per unit
B) $16 per unit
C) $11 per unit
D) $10 per unit
132) Elbrege Corporation manufactures a single product. The company has supplied the following
data:
Selling price per unit
$
30
Variable costs per unit:
Production
$
7
Selling and administrative
$
4
Fixed costs per year:
Production
$
75,000
Selling and administrative
$
50,000
There was no beginning inventory. During the year 25,000 units were produced and 20,000 units
were sold.
The company’s net operating income for the year under variable costing would be:
A) $255,000
B) $270,000
C) $200,000
D) $280,000
Sales ($30 per unit × 20,000 units)
Variable expenses:
Variable cost of goods sold
($7 per unit × 20,000 units)
$
140,000
Variable selling and administrative
($4 per unit × 20,000 units)
Contribution margin
Fixed expenses:
Fixed manufacturing overhead
Fixed selling and administrative expense
Net operating income