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Student name:__________
1) Dattilio Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable cost per unit:
Direct materials $ 65
Fixed costs per year:
Direct labor $ 1,495,200
Fixed manufacturing overhead $ 2,305,100
Fixed selling and administrative expenses $ 1,986,600
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 62,300 units
and sold 60,200 units. The company’s only product is sold for $241 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the
year.
b. Assume the company uses super-variable costing. Prepare an income statement for the year.
2) Valcarcel Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable cost per unit:
Direct materials $ 80
Fixed costs per year:
Direct labor $ 910,800
Fixed manufacturing overhead $ 1,742,400
Fixed selling and administrative expenses $ 1,413,400
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The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 39,600 units
and sold 38,200 units. The company’s only product is sold for $210 per unit.
Required:
a-1. Assume the company uses super-variable costing. Compute the unit product cost for the
year.
a-2. Prepare an income statement for the year.
b-1. Assume that the company uses a variable costing system that assigns $23 of direct labor
cost to each unit that is produced. Compute the unit product cost for the year.
b-2. Prepare an income statement for the year.
c. Prepare a reconciliation that explains the difference between the super-variable costing and
variable costing net incomes.
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3) Schubert Corporation manufactures and sells one product. In the company’s first year of
operations, the variable cost consisted solely of direct materials of $86 per unit. The annual fixed
costs were $510,000 of direct labor cost, $2,210,000 of fixed manufacturing overhead expense,
and $1,209,000 of fixed selling and administrative expense. The company does not have any
variable manufacturing overhead costs or variable selling and administrative expenses. During its
first year of operations, the company produced 34,000 units and sold 31,000 units. The
company’s only product is sold for $232 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year
and prepare an income statement for the year.
b. Assume that the company uses a variable costing system that assigns $15 of direct labor cost
to each unit that is produced. Compute the unit product cost for the year and prepare an income
statement for the year.
4) Guillaume Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable cost per unit:
Direct materials $ 97
Fixed costs per year:
Direct labor $ 1,288,000
Fixed manufacturing overhead $ 3,312,000
Fixed selling and administrative expenses $ 1,271,000
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The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 46,000 units
and sold 41,000 units. The company’s only product is sold for $260 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year
and prepare an income statement for the year.
b. Assume that the company uses a variable costing system that assigns $28 of direct labor cost
to each unit that is produced. Compute the unit product cost for the year and prepare an income
statement for the year.
5) Nurre Corporation manufactures and sells one product. In the company’s first year of
operations, the variable cost consisted solely of direct materials of $88 per unit. The annual fixed
costs were $729,000 of direct labor cost, $1,917,000 of fixed manufacturing overhead expense,
and $814,000 of fixed selling and administrative expense. The company does not have any
variable manufacturing overhead costs or variable selling and administrative expenses. During its
first year of operations, the company produced 27,000 units and sold 22,000 units. The
company’s only product is sold for $247 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year
and prepare an income statement for the year.
b. Assume that the company uses an absorption costing system that assigns $27 of direct labor
cost and $71 of fixed manufacturing overhead to each unit that is produced. Compute the unit
product cost for the year and prepare an income statement for the year.
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6) Sawicki Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable cost per unit:
Direct materials $ 93
Fixed costs per year:
Direct labor $ 250,000
Fixed manufacturing overhead $ 1,550,000
Fixed selling and administrative expenses $ 666,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 25,000 units
and sold 18,000 units. The company’s only product is sold for $224 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year
and prepare an income statement for the year.
b. Assume that the company uses an absorption costing system that assigns $10 of direct labor
cost and $62 of fixed manufacturing overhead to each unit that is produced. Compute the unit
product cost for the year and prepare an income statement for the year.
7) Dattilio Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable cost per unit:
Direct materials $ 80
Fixed costs per year:
Direct labor $ 1,404,000
Fixed manufacturing overhead $ 3,402,000
Fixed selling and administrative expenses $ 1,617,000
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The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 54,000 units
and sold 49,000 units. The company’s only product is sold for $238 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the
year.
b. Assume the company uses super-variable costing. Prepare an income statement for the year.
8) Drucker Corporation manufactures and sells one product. In the company’s first year of
operations, the variable cost consisted solely of direct materials of $84 per unit. The annual fixed
costs were $288,000 of direct labor cost, $1,728,000 of fixed manufacturing overhead expense,
and $782,000 of fixed selling and administrative expense. The company does not have any
variable manufacturing overhead costs or variable selling and administrative expenses. During its
first year of operations, the company produced 24,000 units and sold 17,000 units. The
company’s only product is sold for $249 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the
year.
b. Assume the company uses super-variable costing. Prepare an income statement for the year.
9) Woodall Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
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Variable cost per unit:
Direct materials $ 98
Fixed costs per year:
Direct labor $ 644,000
Fixed manufacturing overhead $ 2,576,000
Fixed selling and administrative expenses $ 1,804,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 46,000 units
and sold 44,000 units. The company’s only product is sold for $235 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year
and prepare an income statement for the year.
b. Assume that the company uses a variable costing system that assigns $14 of direct labor cost
to each unit that is produced. Compute the unit product cost for the year and prepare an income
statement for the year.
c. Assume that the company uses an absorption costing system that assigns $14 of direct labor
cost and $56 of fixed manufacturing overhead to each unit that is produced. Compute the unit
product cost for the year and prepare an income statement for the year.
d. Prepare a reconciliation that explains the difference between the super-variable costing and
variable costing net incomes.
e. Prepare a reconciliation that explains the difference between the super-variable costing and
absorption costing net incomes.
10) Shelko Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable cost per unit:
Direct materials $ 98
Fixed costs per year:
Direct labor $ 1,176,000
Fixed manufacturing overhead $ 2,940,000
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Fixed selling and administrative expenses $ 1,443,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 42,000 units
and sold 37,000 units. The company’s only product is sold for $272 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year
and prepare an income statement for the year.
b. Assume that the company uses an absorption costing system that assigns $28 of direct labor
cost and $70 of fixed manufacturing overhead to each unit that is produced. Compute the unit
product cost for the year and prepare an income statement for the year.
c. Prepare a reconciliation that explains the difference between the super-variable costing and
absorption costing net incomes.
11) Valcarcel Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable cost per unit:
Direct materials $ 84
Fixed costs per year:
Direct labor $ 403,000
Fixed manufacturing overhead $ 1,767,000
Fixed selling and administrative expenses $ 1,150,000
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The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 31,000 units
and sold 25,000 units. The company’s only product is sold for $233 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year
and prepare an income statement for the year.
b. Assume that the company uses a variable costing system that assigns $13 of direct labor cost
to each unit that is produced. Compute the unit product cost for the year and prepare an income
statement for the year.
c. Prepare a reconciliation that explains the difference between the super-variable costing and
variable costing net incomes.
12) Under super-variable costing, which of the following is treated as a period cost?
Direct material Variable manufacturing overhead
A) Yes Yes
B) No Yes
C) Yes No
D) No No
A) Choice A
B) Choice B
C) Choice C
D) Choice D
13) Super-variable costing is most appropriate where:
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A) direct labor is a fixed cost.
B) it is easy to accurately separate the variable and fixed components of manufacturing
overhead.
C) direct labor is a variable cost.
D) manufacturing overhead consists entirely of variable cost.
14) Grandin Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 97
Fixed costs per year:
Direct labor $ 1,056,000
Fixed manufacturing overhead $ 2,288,000
Fixed selling and administrative expenses $ 1,435,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 44,000 units
and sold 41,000 units. The company’s only product is sold for $242 per unit.
The company is considering using either super-variable costing or a variable costing system
that assigns $24 of direct labor cost to each unit that is produced. Which of the following
statements is true regarding the net operating income in the first year?
A) Super-variable costing net operating income exceeds variable costing net operating
income by $72,000.
B) Variable costing net operating income exceeds super-variable costing net operating
income by $156,000.
C) Super-variable costing net operating income exceeds variable costing net operating
income by $156,000.
D) Variable costing net operating income exceeds super-variable costing net operating
income by $72,000.
15) Paparelli Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
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Direct materials $ 99
Fixed costs per year:
Direct labor $ 480,000
Fixed manufacturing overhead $ 1,580,000
Fixed selling and administrative expenses $ 482,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 25,500 units
and sold 19,000 units. The company’s only product is sold for $226 per unit.
The net operating income (loss) for the year under super-variable costing is:
A) $(129,000)
B) $(1,073,000)
C) $772,500
D) $6,500
16) Paparelli Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 80
Fixed costs per year:
Direct labor $ 800,000
Fixed manufacturing overhead $ 2,720,000
Fixed selling and administrative expenses $ 1,452,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 40,000 units
and sold 33,000 units. The company’s only product is sold for $240 per unit.
The net operating income for the year under super-variable costing is:
A) $308,000
B) $(252,000)
C) $924,000
D) $448,000
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17) Souffront Corporation manufactures and sells one product. In the company’s first year of
operations, the variable cost consisted solely of direct materials of $86 per unit. The annual fixed
costs were $1,255,400 of direct labor cost, $3,348,200 of fixed manufacturing overhead expense,
and $1,463,100 of fixed selling and administrative expense. The company does not have any
variable manufacturing overhead costs or variable selling and administrative expenses. During its
first year of operations, the company produced 52,200 units and sold 48,800 units. The
company’s only product is sold for $224 per unit. The net operating income for the year under
super-variable costing is:
A) $667,700
B) $1,062,849
C) $1,923,100
D) $4,015,900
18) Souffront Corporation manufactures and sells one product. In the company’s first year of
operations, the variable cost consisted solely of direct materials of $97 per unit. The annual fixed
costs were $1,416,000 of direct labor cost, $3,776,000 of fixed manufacturing overhead expense,
and $1,650,000 of fixed selling and administrative expense. The company does not have any
variable manufacturing overhead costs or variable selling and administrative expenses. During its
first year of operations, the company produced 59,000 units and sold 55,000 units. The
company’s only product is sold for $251 per unit. The net operating income for the year under
super-variable costing is:
A) $1,628,000
B) $1,724,000
C) $1,240,000
D) $1,980,000
19) Michelman Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 89
Fixed costs per year:
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Direct labor $ 952,000
Fixed manufacturing overhead $ 2,550,000
Fixed selling and administrative expenses $ 992,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 34,000 units
and sold 31,000 units. The company’s only product is sold for $254 per unit.
The company is considering using either super-variable costing or an absorption costing
system that assigns $28 of direct labor cost and $75 of fixed manufacturing overhead to each unit
that is produced. Which of the following statements is true regarding the net operating income in
the first year?
A) Absorption costing net operating income exceeds super-variable costing net
operating income by $309,000.
B) Absorption costing net operating income exceeds super-variable costing net
operating income by $225,000.
C) Super-variable costing net operating income exceeds absorption costing net operating
income by $309,000.
D) Super-variable costing net operating income exceeds absorption costing net
operating income by $225,000.
20) Buckbee Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 97
Fixed costs per year:
Direct labor $ 629,000
Fixed manufacturing overhead $ 2,849,000
Fixed selling and administrative expenses $ 1,056,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 37,000 units
and sold 32,000 units. The company’s only product is sold for $261 per unit.
The unit product cost under super-variable costing is:
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A) $97 per unit
B) $191 per unit
C) $224 per unit
D) $114 per unit
21) Buckbee Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 91
Fixed costs per year:
Direct labor $ 972,000
Fixed manufacturing overhead $ 2,331,000
Fixed selling and administrative expenses $ 1,734,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 48,000 units
and sold 43,500 units. The company’s only product is sold for $223 per unit.
The net operating income for the year under super-variable costing is:
A) $705,000
B) $295,500
C) $1,114,500
D) $562,500
22) Buckbee Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 97
Fixed costs per year:
Direct labor $ 629,000
Fixed manufacturing overhead $ 2,849,000
Fixed selling and administrative expenses $ 1,056,000
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The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 37,000 units
and sold 32,000 units. The company’s only product is sold for $261 per unit.
The net operating income for the year under super-variable costing is:
A) $799,000
B) $229,000
C) $714,000
D) $1,184,000
23) Buckbee Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 97
Fixed costs per year:
Direct labor $ 629,000
Fixed manufacturing overhead $ 2,849,000
Fixed selling and administrative expenses $ 1,056,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 37,000 units
and sold 32,000 units. The company’s only product is sold for $261 per unit.
Assume that the company uses a variable costing system that assigns $17 of direct labor cost to
each unit that is produced. The unit product cost under this costing system is:
A) $114 per unit
B) $191 per unit
C) $97 per unit
D) $224 per unit
24) Buckbee Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 97
Fixed costs per year:
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Direct labor $ 629,000
Fixed manufacturing overhead $ 2,849,000
Fixed selling and administrative expenses $ 1,056,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 37,000 units
and sold 32,000 units. The company’s only product is sold for $261 per unit.
Assume that the company uses a variable costing system that assigns $17 of direct labor cost to
each unit that is produced. The net operating income under this costing system is:
A) $1,184,000
B) $229,000
C) $714,000
D) $799,000
25) Leheny Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 85
Fixed costs per year:
Direct labor $ 1,155,000
Fixed manufacturing overhead $ 3,190,000
Fixed selling and administrative expenses $ 2,300,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 55,000 units
and sold 50,000 units. The company’s only product is sold for $238 per unit.
The net operating income for the year under super-variable costing is:
A) $1,400,000
B) $1,110,000
C) $1,005,000
D) $580,000
26) Leheny Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
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Direct materials $ 85
Fixed costs per year:
Direct labor $ 1,155,000
Fixed manufacturing overhead $ 3,190,000
Fixed selling and administrative expenses $ 2,300,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 55,000 units
and sold 50,000 units. The company’s only product is sold for $238 per unit.
Assume that the company uses a variable costing system that assigns $21 of direct labor cost to
each unit that is produced. The net operating income under this costing system is:
A) $1,400,000
B) $1,005,000
C) $1,110,000
D) $580,000
27) Leheny Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 85
Fixed costs per year:
Direct labor $ 1,155,000
Fixed manufacturing overhead $ 3,190,000
Fixed selling and administrative expenses $ 2,300,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 55,000 units
and sold 50,000 units. The company’s only product is sold for $238 per unit.
Assume that the company uses an absorption costing system that assigns $21 of direct labor
cost and $58 of fixed manufacturing overhead to each unit that is produced. The net operating
income under this costing system is:
A) $580,000
B) $1,400,000
C) $1,005,000
D) $1,110,000
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28) Union Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 82
Fixed costs per year:
Direct labor $ 528,000
Fixed manufacturing overhead $ 1,632,000
Fixed selling and administrative expenses $ 646,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 24,000 units
and sold 17,000 units. The company’s only product is sold for $232 per unit.
The net operating income for the year under super-variable costing is:
A) $(256,000)
B) $(830,000)
C) $(102,000)
D) $374,000
29) Union Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 82
Fixed costs per year:
Direct labor $ 528,000
Fixed manufacturing overhead $ 1,632,000
Fixed selling and administrative expenses $ 646,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 24,000 units
and sold 17,000 units. The company’s only product is sold for $232 per unit.
Assume that the company uses an absorption costing system that assigns $22 of direct labor
cost and $68 of fixed manufacturing overhead to each unit that is produced. The net operating
income under this costing system is:
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A) $(102,000)
B) $374,000
C) $(830,000)
D) $(256,000)
30) Letcher Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 89
Fixed costs per year:
Direct labor $ 616,000
Fixed manufacturing overhead $ 3,472,000
Fixed selling and administrative expenses $ 1,782,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 56,000 units
and sold 54,000 units. The company’s only product is sold for $227 per unit.
The net operating income for the year under super-variable costing is:
A) $1,604,000
B) $1,404,000
C) $1,582,000
D) $1,728,000
31) Letcher Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 110
Fixed costs per year:
Direct labor $ 831,600
Fixed manufacturing overhead $ 4,227,300
Fixed selling and administrative expenses $ 2,169,600
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The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 69,300 units
and sold 66,900 units. The company’s only product is sold for $283 per unit.
The company is considering using either super-variable costing or a variable costing system
that assigns $12 of direct labor cost to each unit that is produced. Which of the following
statements is true regarding the net operating income in the first year?
A) Variable costing net operating income exceeds super-variable costing net operating
income by $146,400.
B) Super-variable costing net operating income exceeds variable costing net operating
income by $146,400.
C) Variable costing net operating income exceeds super-variable costing net operating
income by $28,800.
D) Super-variable costing net operating income exceeds variable costing net operating
income by $28,800.
32) Letcher Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 89
Fixed costs per year:
Direct labor $ 616,000
Fixed manufacturing overhead $ 3,472,000
Fixed selling and administrative expenses $ 1,782,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 56,000 units
and sold 54,000 units. The company’s only product is sold for $227 per unit.
The company is considering using either super-variable costing or a variable costing system
that assigns $11 of direct labor cost to each unit that is produced. Which of the following
statements is true regarding the net operating income in the first year?
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A) Variable costing net operating income exceeds super-variable costing net operating
income by $124,000.
B) Super-variable costing net operating income exceeds variable costing net operating
income by $124,000.
C) Variable costing net operating income exceeds super-variable costing net operating
income by $22,000.
D) Super-variable costing net operating income exceeds variable costing net operating
income by $22,000.
33) Letcher Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 89
Fixed costs per year:
Direct labor $ 616,000
Fixed manufacturing overhead $ 3,472,000
Fixed selling and administrative expenses $ 1,782,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 56,000 units
and sold 54,000 units. The company’s only product is sold for $227 per unit.
The company is considering using either super-variable costing or an absorption costing
system that assigns $11 of direct labor cost and $62 of fixed manufacturing overhead to each unit
that is produced. Which of the following statements is true regarding the net operating income in
the first year?
A) Super-variable costing net operating income exceeds absorption costing net
operating income by $146,000.
B) Absorption costing net operating income exceeds super-variable costing net
operating income by $124,000.
C) Super-variable costing net operating income exceeds absorption costing net operating
income by $124,000.
D) Absorption costing net operating income exceeds super-variable costing net
operating income by $146,000.
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34) Dallavalle Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 93
Fixed costs per year:
Direct labor $ 320,000
Fixed manufacturing overhead $ 2,144,000
Fixed selling and administrative expenses $ 1,364,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 32,000 units
and sold 31,000 units. The company’s only product is sold for $238 per unit.
The unit product cost under super-variable costing is:
A) $214 per unit
B) $93 per unit
C) $170 per unit
D) $103 per unit
35) Dallavalle Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 93
Fixed costs per year:
Direct labor $ 320,000
Fixed manufacturing overhead $ 2,144,000
Fixed selling and administrative expenses $ 1,364,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 32,000 units
and sold 31,000 units. The company’s only product is sold for $238 per unit.
Assume that the company uses a variable costing system that assigns $10 of direct labor cost to
each unit that is produced. The unit product cost under this costing system is:
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A) $170 per unit
B) $214 per unit
C) $93 per unit
D) $103 per unit
36) Dallavalle Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 93
Fixed costs per year:
Direct labor $ 320,000
Fixed manufacturing overhead $ 2,144,000
Fixed selling and administrative expenses $ 1,364,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 32,000 units
and sold 31,000 units. The company’s only product is sold for $238 per unit.
Assume that the company uses an absorption costing system that assigns $10 of direct labor
cost and $67 of fixed manufacturing overhead to each unit that is produced. The unit product
cost under this costing system is:
A) $103 per unit
B) $214 per unit
C) $170 per unit
D) $93 per unit
37) Dallavalle Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 93
Fixed costs per year:
Direct labor $ 320,000
Fixed manufacturing overhead $ 2,144,000
Fixed selling and administrative expenses $ 1,364,000
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The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 32,000 units
and sold 31,000 units. The company’s only product is sold for $238 per unit.
The company is considering using either super-variable costing or a variable costing system
that assigns $10 of direct labor cost to each unit that is produced. Which of the following
statements is true regarding the net operating income in the first year?
A) Variable costing net operating income exceeds super-variable costing net operating
income by $10,000.
B) Super-variable costing net operating income exceeds variable costing net operating
income by $10,000.
C) Super-variable costing net operating income exceeds variable costing net operating
income by $67,000.
D) Variable costing net operating income exceeds super-variable costing net operating
income by $67,000.
38) Dallavalle Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 93
Fixed costs per year:
Direct labor $ 320,000
Fixed manufacturing overhead $ 2,144,000
Fixed selling and administrative expenses $ 1,364,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 32,000 units
and sold 31,000 units. The company’s only product is sold for $238 per unit.
The company is considering using either super-variable costing or an absorption costing
system that assigns $10 of direct labor cost and $67 of fixed manufacturing overhead to each unit
that is produced. Which of the following statements is true regarding the net operating income in
the first year?
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A) Super-variable costing net operating income exceeds absorption costing net
operating income by $1,000.
B) Super-variable costing net operating income exceeds absorption costing net operating
income by $77,000.
C) Absorption costing net operating income exceeds super-variable costing net
operating income by $77,000.
D) Absorption costing net operating income exceeds super-variable costing net
operating income by $1,000.
39) Marcelin Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 92
Fixed costs per year:
Direct labor $ 1,122,000
Fixed manufacturing overhead $ 3,927,000
Fixed selling and administrative expenses $ 1,932,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 51,000 units
and sold 46,000 units. The company’s only product is sold for $276 per unit.
The unit product cost under super-variable costing is:
A) $191 per unit
B) $233 per unit
C) $114 per unit
D) $92 per unit
40) Marcelin Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 64
Fixed costs per year:
Direct labor $ 884,400
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Fixed manufacturing overhead $ 2,894,400
Fixed selling and administrative expenses $ 1,424,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 40,200 units
and sold 38,800 units. The company’s only product is sold for $265 per unit.
The net operating income for the year under super-variable costing is:
A) $5,490,400
B) $4,020,000
C) $7,798,800
D) $2,596,000
41) Marcelin Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 92
Fixed costs per year:
Direct labor $ 1,122,000
Fixed manufacturing overhead $ 3,927,000
Fixed selling and administrative expenses $ 1,932,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 51,000 units
and sold 46,000 units. The company’s only product is sold for $276 per unit.
The net operating income for the year under super-variable costing is:
A) $1,593,000
B) $1,023,000
C) $1,978,000
D) $1,483,000
42) Marcelin Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 92
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Fixed costs per year:
Direct labor $ 1,122,000
Fixed manufacturing overhead $ 3,927,000
Fixed selling and administrative expenses $ 1,932,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 51,000 units
and sold 46,000 units. The company’s only product is sold for $276 per unit.
The company is considering using either super-variable costing or a variable costing system
that assigns $22 of direct labor cost to each unit that is produced. Which of the following
statements is true regarding the net operating income in the first year?
A) Variable costing net operating income exceeds super-variable costing net operating
income by $110,000.
B) Super-variable costing net operating income exceeds variable costing net operating
income by $385,000.
C) Super-variable costing net operating income exceeds variable costing net operating
income by $110,000.
D) Variable costing net operating income exceeds super-variable costing net operating
income by $385,000.
43) Tremble Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 94
Fixed costs per year:
Direct labor $ 539,000
Fixed manufacturing overhead $ 3,675,000
Fixed selling and administrative expenses $ 1,350,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 49,000 units
and sold 45,000 units. The company’s only product is sold for $233 per unit.
The unit product cost under super-variable costing is:
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A) $180 per unit
B) $105 per unit
C) $94 per unit
D) $210 per unit
44) Tremble Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 94
Fixed costs per year:
Direct labor $ 539,000
Fixed manufacturing overhead $ 3,675,000
Fixed selling and administrative expenses $ 1,350,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 49,000 units
and sold 45,000 units. The company’s only product is sold for $233 per unit.
The net operating income for the year under super-variable costing is:
A) $735,000
B) $1,035,000
C) $691,000
D) $315,000
45) Tremble Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 94
Fixed costs per year:
Direct labor $ 539,000
Fixed manufacturing overhead $ 3,675,000
Fixed selling and administrative expenses $ 1,350,000
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The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 49,000 units
and sold 45,000 units. The company’s only product is sold for $233 per unit.
Assume that the company uses a variable costing system that assigns $11 of direct labor cost to
each unit that is produced. The unit product cost under this costing system is:
A) $105 per unit
B) $180 per unit
C) $94 per unit
D) $210 per unit
46) Tremble Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 94
Fixed costs per year:
Direct labor $ 539,000
Fixed manufacturing overhead $ 3,675,000
Fixed selling and administrative expenses $ 1,350,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 49,000 units
and sold 45,000 units. The company’s only product is sold for $233 per unit.
Assume that the company uses a variable costing system that assigns $11 of direct labor cost to
each unit that is produced. The net operating income under this costing system is:
A) $1,035,000
B) $691,000
C) $315,000
D) $735,000
47) Tremble Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 102
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Fixed costs per year:
Direct labor $ 1,605,400
Fixed manufacturing overhead $ 5,514,200
Fixed selling and administrative expenses $ 5,451,300
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 69,800 units
and sold 67,300 units. The company’s only product is sold for $283 per unit.
Assume that the company uses an absorption costing system that assigns $23 of direct labor
cost and $79 of fixed manufacturing overhead to each unit that is produced. The unit product
cost under this costing system is:
A) $102 per unit
B) $204 per unit
C) $125 per unit
D) $285 per unit
48) Tremble Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 94
Fixed costs per year:
Direct labor $ 539,000
Fixed manufacturing overhead $ 3,675,000
Fixed selling and administrative expenses $ 1,350,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 49,000 units
and sold 45,000 units. The company’s only product is sold for $233 per unit.
Assume that the company uses an absorption costing system that assigns $11 of direct labor
cost and $75 of fixed manufacturing overhead to each unit that is produced. The unit product
cost under this costing system is:
A) $94 per unit
B) $180 per unit
C) $105 per unit
D) $210 per unit
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49) Tremble Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 94
Fixed costs per year:
Direct labor $ 539,000
Fixed manufacturing overhead $ 3,675,000
Fixed selling and administrative expenses $ 1,350,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 49,000 units
and sold 45,000 units. The company’s only product is sold for $233 per unit.
Assume that the company uses an absorption costing system that assigns $11 of direct labor
cost and $75 of fixed manufacturing overhead to each unit that is produced. The net operating
income under this costing system is:
A) $315,000
B) $1,035,000
C) $735,000
D) $691,000
50) Stubenrauch Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 91
Fixed costs per year:
Direct labor $ 532,000
Fixed manufacturing overhead $ 2,128,000
Fixed selling and administrative expenses $ 1,280,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 38,000 units
and sold 32,000 units. The company’s only product is sold for $240 per unit.
The net operating income for the year under super-variable costing is:
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A) $912,000
B) $1,248,000
C) $282,000
D) $828,000
51) Stubenrauch Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 91
Fixed costs per year:
Direct labor $ 532,000
Fixed manufacturing overhead $ 2,128,000
Fixed selling and administrative expenses $ 1,280,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 38,000 units
and sold 32,000 units. The company’s only product is sold for $240 per unit.
Assume that the company uses a variable costing system that assigns $14 of direct labor cost to
each unit that is produced. The net operating income under this costing system is:
A) $282,000
B) $912,000
C) $1,248,000
D) $828,000
52) Labadie Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 94
Fixed costs per year:
Direct labor $ 575,000
Fixed manufacturing overhead $ 1,600,000
Fixed selling and administrative expenses $ 748,000
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The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 25,000 units
and sold 22,000 units. The company’s only product is sold for $251 per unit.
The unit product cost under super-variable costing is:
A) $117 per unit
B) $215 per unit
C) $94 per unit
D) $181 per unit
53) Labadie Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 109
Fixed costs per year:
Direct labor $ 1,745,000
Fixed manufacturing overhead $ 5,653,800
Fixed selling and administrative expenses $ 4,583,200
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 69,800 units
and sold 67,400 units. The company’s only product is sold for $286 per unit.
Assume that the company uses a variable costing system that assigns $25 of direct labor cost to
each unit that is produced. The unit product cost under this costing system is:
A) $215 per unit
B) $134 per unit
C) $109 per unit
D) $283 per unit
54) Labadie Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 94
Fixed costs per year:
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Direct labor $ 575,000
Fixed manufacturing overhead $ 1,600,000
Fixed selling and administrative expenses $ 748,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 25,000 units
and sold 22,000 units. The company’s only product is sold for $251 per unit.
Assume that the company uses a variable costing system that assigns $23 of direct labor cost to
each unit that is produced. The unit product cost under this costing system is:
A) $181 per unit
B) $117 per unit
C) $94 per unit
D) $215 per unit
55) Labadie Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable costs per unit:
Direct materials $ 94
Fixed costs per year:
Direct labor $ 575,000
Fixed manufacturing overhead $ 1,600,000
Fixed selling and administrative expenses $ 748,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 25,000 units
and sold 22,000 units. The company’s only product is sold for $251 per unit.
The company is considering using either super-variable costing or a variable costing system
that assigns $23 of direct labor cost to each unit that is produced. Which of the following
statements is true regarding the net operating income in the first year?
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A) Super-variable costing net operating income exceeds variable costing net operating
income by $69,000.
B) Variable costing net operating income exceeds super-variable costing net operating
income by $69,000.
C) Super-variable costing net operating income exceeds variable costing net operating
income by $192,000.
D) Variable costing net operating income exceeds super-variable costing net operating
income by $192,000.
56) The super-variable costing net operating income period can be computed by multiplying
the number of units sold by the gross margin per unit.
⊚ true
⊚ false
57) All differences between super-variable costing and variable costing net operating income
are explained by the accounting for manufacturing overhead costs.
⊚ true
⊚ false
58) Super-variable costing is a costing method that treats direct labor and manufacturing
overhead costs as product costs.
⊚ true
⊚ false
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Answer Key
Test name: chapter 6A
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