ACG2071 Ch 19 Flashcards

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?

$1,462,800 Signup and view all the answers

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

$1,495,000 Signup and view all the answers

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

$139.50 Signup and view all the answers

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

$535,000 Signup and view all the answers

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

$327,000 Signup and view all the answers

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

$93,500 Signup and view all the answers

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

$111 Signup and view all the answers

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

$43.00 Signup and view all the answers

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

$48.00 Signup and view all the answers

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

$672,000 Signup and view all the answers

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

$602,000 Signup and view all the answers

Compute the net income under absorption costing for Advanced Company.

$183,000 Signup and view all the answers

What is net income under variable costing for Advanced Company?

$113,000 Signup and view all the answers

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

$16,160 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?

$524 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?

-$4,120 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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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.