ACCT 2020 Unit 1 Smartbook

Granny's Touch manufactures and sells cookbooks. The company's variable cost of goods sold is $39,200 and variable selling and administrative expense is $6,200. Fixed manufacturing overhead is $19,700 and fixed selling and administrative expense is $9,290. An income statement prepared using variable costing shows $____ as the total fixed expenses

$28,990

Pearls, Pearls, Pearls! manufactures and sells jewelry. The total variable cost of goods sold this month is $72,490. Variable selling and administrative cost is $22 per unit sold. If 350 units are produced and 314 units are sold this month, the total variable cost reported on the income statement for the month is $_____

$79,398

The unit product cost of a blender is $24. If 900 blenders are produced and 849 blenders are sold, the total cost of goods sold is $____

20,376

When inventory increases, which costing method generally results in higher net income?

Absorption costing

The variable costing income statement separates ____ a. direct and indirect expenses b. variable and fixed expenses c. product and period costs d. selling and administrative expenses

b. variable and fixed expenses

A variable costing income statement:

calculates contribution margin while the absorption costing income statement calculates gross margin focuses on fixed and variable expenses, while an absorption costing income statement focuses on period and product costs

If a segment is eliminated, _____ fixed costs that are not traced to the segment will not change.

commomn

When a segment is eliminated, a:

common fixed cost will remain unchanged traceable fixed cost will disappear

When preparing a contribution margin income statement:

cost of goods sold consists of only variable manufacturing costs variable and fixed costs are listed in separate sections of the statement

When inventory increases, absorption costing net operating income is higher than variable costing net income due to the fixed manufacturing overhead:

deferred in the inventory account on the balance sheet

An absorption costing income statement calculates:

gross margin by deducting cost of goods sold from sales

A segment should be discontinued when the segment:

has a contribution margin that cannot cover traceable fixed costs cannot cover its own costs

Net operating income under absorption costing is generally ______ net operating income under variable costing in periods in which inventory increases.

higher than

When units sold exceed units produced, net income under variable costing will generally be _______ net income under absorption costing.

higher than

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

Segmented income statements:

may be prepared for activities at many levels in a company

When inventory decreases, cost of goods sold under absorption costing will be ______ cost of goods sold under variable costing.

more than

When a segment cannot cover its own costs, that segment should:

probably be dropped

When allocating fixed manufacturing overhead cost to units under absorption costing, the total fixed overhead costs must be divided by the number of units ____.

produced

Absorption costing treats fixed manufacturing overhead as a ______ cost.

product

when there is no change in inventory, net operating income will be:

the same under both absorption costing and variable costing

The segment margin is obtained by deducting the ______ fixed costs of a segment from the segment's ______.

traceable, CM

When the number of units produced equals the number of units sold:

under both absorption costing and variable costing, all fixed overhead incurred flows to the income statement. absorption costing net income is equal to variable costing net income

Costs are separated between variable and fixed expenses when using ______ costing, whereas ______ costing separates costs between product and period. Multiple choice question.

variable, absorption

Blissful Breeze manufactures and sells ceiling fans. Variable selling and administrative expense is $11.50 per fan and fixed selling and administrative expense is $7,800 per month. If Blissful Breeze produces 900 fans and sells 842 fans this month, total selling and administrative expenses will be

$ 17,483

Sleep Tight manufactures pillows. The company incurred $42,000 of fixed manufacturing overhead cost this year. Variable unit product cost was $17. Variable selling and administrative cost was $9 per unit and fixed selling and administrative expenses totaled $59,000. The company manufactured 28,000 pillows and sold 15,408. Total fixed expenses on the variable costing contribution format income statement equal:

$101,000

Comfy Cozy Chairs makes and sells rockers. Each rocker requires $45 of direct materials and $37 of direct labor. Variable manufacturing overhead amounts to $8 per unit, and fixed manufacturing overhead totals $58,000. Variable selling and administrative costs amount to $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

$119

The Quaint Quilt produces and sells handmade quilts. Variable manufacturing costs total $140 per quilt. Fixed manufacturing overhead totals $68,250 per quarter. Variable selling and administrative costs are $19 per quilt sold, and fixed selling and administrative costs are $50,000 per quarter. Last quarter, the company produced 910 quilts and sold 780 quilts. The total variable cost reported on Quaint Quilt's variable costing income statement is: Multiple choice question.

$124,020

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

$155 per unit

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:

$47 per unit

Citrus Scents produces body sprays. Variable selling and administrative expense is $1.05 per bottle and fixed selling and administrative expense is $4,500 per month. The company produced 1,490 bottles this month, and sold 1,203 of those bottles. Total selling and administrative expense for the month was:

$5,763.15

Costs are categorized by function when using ____ costing and by behavior when using ____ costing.

absorption, variable

When using absorption costing, fixed manufacturing overhead cost per unit = Total fixed manufacturing overhead divided by:

units produced

Segment contribution margin equals segment revenue minus the _______ expenses for the segment.

variable

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:

$6,472.14

Fixed manufacturing overhead costs are expensed as units are sold as part of cost of goods sold under _____ costing, and expensed in full with period costs under _____ costing.

absorption, variable

Net operating income is less under absorption costing than under variable costing when inventory for the period:

decreases