ACG2071 Ch 19 Flashcards
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Questions and Answers

What is net income under absorption costing for Jeter Corporation?

$252,000

Compute the product cost per unit under variable costing for Sea Company.

$98.00

What is the product cost per unit under absorption costing?

$50.50 per unit

What is the contribution margin for Decko Industries if 53,000 units were sold?

<p>$1,462,800</p> Signup and view all the answers

What is the contribution margin for Alexis Co. for Part A?

<p>$1,495,000</p> Signup and view all the answers

Compute the product cost per unit under absorption costing for Sea Company.

<p>$139.50</p> Signup and view all the answers

What is the contribution margin for Geneva Co. for July?

<p>$535,000</p> Signup and view all the answers

Calculate the operating income for Brush Industries for May under absorption costing.

<p>$327,000</p> Signup and view all the answers

What is the value of ending inventory under absorption costing for McCormick Company?

<p>$93,500</p> Signup and view all the answers

What is the unit product cost for Hayes Inc. using variable costing?

<p>$111</p> Signup and view all the answers

Compute cost per unit of finished goods under variable costing for Advanced Company.

<p>$43.00</p> Signup and view all the answers

Calculate the cost per unit of finished goods under absorption costing for Advanced Company.

<p>$48.00</p> Signup and view all the answers

What is the cost of finished goods in inventory under absorption costing for Advanced Company?

<p>$672,000</p> Signup and view all the answers

What is the cost of finished goods in inventory under variable costing for Advanced Company?

<p>$602,000</p> Signup and view all the answers

Compute the net income under absorption costing for Advanced Company.

<p>$183,000</p> Signup and view all the answers

What is net income under variable costing for Advanced Company?

<p>$113,000</p> Signup and view all the answers

What is Red and White's contribution margin for this month if 1,010 units were sold?

<p>$16,160</p> Signup and view all the answers

What is Red and White's net income under absorption costing if 1,010 units are sold and selling and administrative expenses are $12,000?

<p>$524</p> Signup and view all the answers

What is Red and White's net income under variable costing if 1,010 units are sold and operating expenses are $12,000?

<p>-$4,120</p> Signup and view all the answers

Study Notes

Jeter Corporation

  • Net income: $222,000 using variable costing
  • Inventory: Beginning at 7,000 units, ending at 12,000 units
  • Fixed overhead per unit: $6
  • Net income under absorption costing: $252,000

Sea Company (Variable Costing)

  • Units produced: 48,000
  • Direct labor cost: $41 per unit
  • Direct materials cost: $34 per unit
  • Variable overhead cost: $23 per unit
  • Product cost per unit under variable costing: $98.00

Absorption Costing Calculation

  • Direct labor cost: $27 per unit
  • Direct materials cost: $21 per unit
  • Total variable overhead: $40,000
  • Total fixed overhead: $110,000
  • Expected production: 60,000 units
  • Product cost per unit under absorption costing: $50.50

Decko Industries

  • Units produced: 55,000
  • Sale price: $36 per unit
  • Direct materials: $1.80 per unit
  • Direct labor: $2.80 per unit
  • Variable overhead: $3.80 per unit
  • Total fixed overhead: $234,300
  • Contribution margin from 53,000 units sold: $1,462,800

Alexis Co. (Part A)

  • Units sold: 4,600
  • Selling price per unit: $950
  • Variable manufacturing cost per unit: $530
  • Sales commission per unit: $95
  • Contribution margin for Part A: $1,495,000

Sea Company (Absorption Costing)

  • Units produced: 61,000
  • Direct labor cost: $54 per unit
  • Direct materials cost: $47 per unit
  • Variable overhead cost: $36 per unit
  • Total fixed overhead: $152,500
  • Product cost per unit under absorption costing: $139.50

Geneva Co.

  • Sales: $765,000
  • Variable costs: $230,000
  • Fixed costs: $105,000
  • Contribution margin for July: $535,000

Brush Industries

  • Sales total: $910,000
  • Fixed cost of goods sold: $102,000
  • Variable cost of goods sold: $252,000
  • Fixed selling and administrative costs: $102,000
  • Variable selling and administrative costs: $127,000
  • Operating income under absorption costing for May: $327,000

McCormick Company

  • Direct materials: $4 per unit
  • Direct labor: $2 per unit
  • Variable overhead: $3 per unit
  • Fixed overhead: $256,000
  • Units produced: 32,000, units sold: 26,500
  • Ending inventory value under absorption costing: $93,500

Hayes Inc.

  • Beginning inventory: 250 units
  • Units produced: 900
  • Units sold: 957
  • Selling price: $300 per unit
  • Direct materials: $50 per unit
  • Direct labor: $31 per unit
  • Variable manufacturing overhead: $30 per unit
  • Fixed manufacturing overhead: $42,300
  • Unit product cost for the year using variable costing: $111

Advanced Company (Variable Costing)

  • Units produced: 35,000
  • Units sold: 21,000
  • Direct materials: $19 per unit
  • Direct labor: $21 per unit
  • Variable overhead: $105,000 total
  • Fixed overhead: $175,000 total
  • Cost per unit of finished goods under variable costing: $43.00

Advanced Company (Absorption Costing)

  • Cost per unit of finished goods under absorption costing: $48.00
  • Cost of finished goods in inventory under absorption costing: $672,000
  • Cost of finished goods in inventory under variable costing: $602,000

Advanced Company (Net Income)

  • Unit sold for $71
  • Operating expenses: $300,000
  • Net income under absorption costing: $183,000
  • Net income under variable costing: $113,000

Red and White Company

  • Units produced: 2,300
  • Sales price: $28 per unit
  • Direct materials: $3 per unit
  • Direct labor: $4 per unit
  • Variable overhead: $5 per unit
  • Fixed overhead: $8,280 in total

Red and White Contribution Margin

  • Contribution margin if 1,010 units are sold: $16,160

Red and White Net Income

  • Net income under absorption costing for 1,010 units sold and $12,000 in selling/administrative expenses: $524
  • Net income under variable costing for 1,010 units sold and $12,000 in operating expenses: -$4,120

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Description

Test your knowledge with these flashcards from ACG2071 Chapter 19. In this quiz, you'll explore key concepts related to variable and absorption costing, including calculations of net income and production costs. Enhance your understanding of financial accounting principles through engaging questions.

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