Accounting Principles - Chapter 19

Hayes Incorporated provided the following information for the current year: Beginning inventory 140 units Units produced 790 units Units sold 834 units Selling price $ 190 /unit Direct materials $ 39 /unit Direct labor $ 20 /unit Variable manufacturing overhead $ 19 /unit Fixed manufacturing overhead $ 28,440 /year Variable selling/administrative costs $ 12 /unit Fixed selling/administrative costs $ 19,500 /year What is the product cost per unit for the year using absorption costing?

$114

Ace Company is a manufacturer of basketballs and began operations this year. The company produced 4,500 units and sold 3,950 units. Each basketball was sold at a price of $45. Fixed overhead costs are $55,000 per year, and fixed selling and administrative costs are $48,600 per year. The company also reports the following per unit variable costs for the year. Direct materials $ 6.00 per unit Direct labor $ 4.00 per unit Variable overhead $ 3.00 per unit Variable selling and administrative expenses $ 2.00 per unit Compute income under variable costing.

$14,900

Belle Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year. Units produced this year 85,000 units Units sold this year 51,000 units Direct materials $ 25 per unit Direct labor $ 27 per unit Variable overhead $ 3 per unit Fixed overhead $ 658,750 in total Given Belle Company's data, compute cost per unit of finished goods under variable costing.

$55.00

Belle Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year. Units produced this year 70,000 units Units sold this year 42,000 units Direct materials $ 22 per unit Direct labor $ 24 per unit Variable overhead $ 3 per unit Fixed overhead $ 490,000 in total Given Belle Company's data, compute cost per unit of finished goods under absorption costing.

$56.00

Belle Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year. Units produced this year 105,000 units Units sold this year 63,000 units Direct materials $ 29 per unit Direct labor $ 31 per unit Variable overhead $ 3 per unit Fixed overhead $ 918,750 in total Belle Company's product is sold for $89 per unit. Variable selling and administrative expense is $2 per unit and fixed selling and administrative is $370,000 per year. Compute the net income under absorption costing.

$590,750

Urban Company reports the following information regarding its production cost: Units produced 40,000 units Direct labor $ 33 per unit Direct materials $ 38 per unit Variable overhead $ 11 per unit Fixed overhead $ 130,000 in total Compute product cost per unit under variable costing.

$82.00

A manufacturer reports the following. Sales $ 740,000 Variable cost of goods sold 285,000 Fixed overhead 165,000 Variable selling and administrative expenses 85,000 Fixed selling and administrative expenses 55,000 Compute the contribution margin ratio.

50%

Empire Airlines reports the following cost data for the year. The company flew 100 private flights during the year. A group has offered Empire $12,400 for a private flight to Chicago for its members. Revenue $ 21,400 per flight Wages, salaries, and benefits $ 8,400 per flight Fuel and oil $ 5,900 per flight Food and beverages $ 780 per flight Depreciation $ 370,000 per year Rent $ 320,000 per year (a) What is the contribution margin from accepting the offer? (b) Should the offer be accepted or rejected?

A. See chart B. Rejected

Which of the following would be reported on a variable costing income statement?

Contribution margin

Which of the following is not a product cost under variable costing?

Fixed overhead (Product cost under variable costing: direct labor, cariable overhead, and direct materials.)

Blazer Chemical produces and sells an ice-melting granular used on roadways and sidewalks in winter. It annually produces and sells 19,125 tons of its granular. Because of this year's mild winter, projected demand for its product is only 15,300 tons. Based on projected production and sales of 15,300 tons, the company estimates the following income using absorption costing. Sales (15,300 tons at $80 per ton) $ 1,224,000 Cost of goods sold (15,300 tons at $60 per ton) 918,000 Gross profit 306,000 Selling and administrative expenses 306,000 Income $ 0 Its product cost per ton follows and consists mainly of fixed overhead because its automated production process uses expensive equipment. Direct materials $ 13 per ton Direct labor $ 4 per ton Variable overhead $ 3 per ton Fixed overhead ($612,000/15,300 tons) $ 40 per ton Selling and administrative expenses consist of variable selling and administrative expenses of $6 p

Increase in income - $122,400