ACC 2362
when units produced exceed units sold, net income will generally be
higher under absorption costing than under variable costing
a traceable fixed cost
is incurred because of the existence of the segment
absorption costing is categorized by
function
Comfy Cozy Chairs makes and sells rockers. Each rocker requires $45 of direct materials and $37 of direct labor. Variable manufacturing overhead is $8 per unit, and fixed manufacturing overhead totals $58,000. Variable selling and administrative costs are $15 per unit, and fixed selling and administrative costs total $102,000. During the period, 2,000 rockers were produced and 1,640 were sold. The unit product cost using absorption costing is ______. Multiple choice question.
$45 + $37+ $8 ($58,000/2,000) = $119
When using absorption costing, fixed manufacturing overhead cost per unit = Total fixed manufacturing overhead divided by units ______.
produced
direct costing or marginal costing are other terms for
variable costing
under variable costing the cost of a unit of inventory does not contain
fixed manufacturing overhead
when allocated fixed manufacturing overhead cost to units under absorption costing, the total fixed overhead costs must be divied by the number of units
produced
Blissful Breeze manufactures and sells ceiling fans. Each fan has a unit product cost of $112 and a unit selling price of $190. If Blissful Breeze produces 900 fans and sells 842 fans this month, the total cost of goods sold will be $
$112 * 842 = 94304
when preparing a segment margin income statement
- traceable fixed expenses are deducted from contribution margin - cost of goods sold consists of only variable manufacturing costs
absorption costing treats fixed manufacturing overhead as a
product cost
when inventory increases, which costing method generally results in higher net income
absorption costing
variable costing is categorized by
behavior
absorption and variable costing net income are usually different due to the accounting for
fixed manufacturing overhead
assigning common fixed costs to segment impacts
segment margin only
Frames, Inc. manufactures large wooden picture frames. Each frame requires $19 of direct materials and $40 of direct labor. Variable manufacturing overhead cost is $9 per frame produced, and variable selling and administrative expense is $13 per frame sold. The company produces 5,000 units each month and total fixed manufacturing overhead cost per month is $15,000. The unit product cost of each frame using variable costing is $
$19 + $40 + $9 =$68
when a segment is eliminated
1. traceable fixed cost will disappear 2. common fixed cost will remain unchanged
Put'er There manufactures baseball gloves. Each glove requires $22 of direct materials and $18 of direct labor. Variable manufacturing overhead cost is $7 per unit and fixed manufacturing overhead cost is $19,000 in total. Variable selling and administrative costs are $11 per unit sold and fixed selling and administrative costs are $13,200. Last period, 800 gloves were produced, and 585 gloves were sold. The unit product cost using variable costing is ______ per unit. Multiple choice question.
$22 + $18 +$7 = $47
Citrus Scents produces body sprays. Each bottle has a unit product cost of $5.38. The company produced 1,490 bottles this month and sold 1,203 of those bottles. Total cost of goods sold was
$5.38 * 1,203 = $6472.14
Given the following information, calculate the unit product cost under absorption costing. Direct materials: $50/unit; Direct labor: $75/unit; Variable manufacturing overhead: $27/unit; Fixed manufacturing overhead: $30,000; Units produced: 10,000; Units sold: 6,000.
$50+ $75 +$27 ($30,000/10,000) = $155 per units
which of the following statements are correct regarding income statements prepared under variable and absorption costing?
- both income statements include product and period costs - reported net income on the statements often differ
product costs under absorption costing include
- direct labor - variable manufacturing overhead - fixed variable overhead - direct materials