1. Which of the following statements is (are) true regarding product costing? (A) Twenty cans of paint that are 25% full are equivalent to Five cans of paint that are completely full. (B) The equivalent unit concept refers to the actual amount of work during the period stated in terms of whole units. O Only A is true O Only B is true. O Both A and B are true. ONeither A nor B is true,

1. Which of the following statements is (are) true regarding product costing? (A) Twenty cans of paint that are 25% full are equivalent to Five cans of paint that are completely full. (B) The equivalent unit concept refers to the actual amount of work during the period stated in terms of whole units. O Only A is true O Only B is true. O Both A and B are true. ONeither A nor B is true,

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter19: Variable Costing (varcost)

Section: Chapter Questions

Problem 4R: To determine the effect of different levels of production on the company’s income, move to cell B7...

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To determine the effect of different levels of production on the company’s income, move to cell B7 (Actual production). Change the number in B7 to the different production levels given in the table below. The first level, 100,000, is the current level. What happens to the operating income on both statements as production levels change? Enter the operating incomes in the following table. Does the level of production affect income under either costing method? Explain your findings.
And this is a supplement of the question . Under an activity-based costing system, what is the per-unit overhead cost of Y? a. $272 b. $ 440 с. $164 d None of the given answers e. $282
a. 1. Prepare an estimated income statement, comparing operating results if 29,600 and 32,800 units are manufactured in the absorption costing format. If an amount box does not require an entry leave it blank. a. 2. Prepare an estimated income statement, comparing operating results if 29,600 and 32,800 units are manufactured in the variable costing format. If an amount box does not require an entry leave it blank. b. What is the reason for the difference in operating income reported for the two levels of production by the absorption costing income statement? The increase in income from operations under absorption costing is caused by the allocation of overhead cost over a number of units. Thus, the cost of goods sold is . The difference can also be explained by the amount of overhead cost included in the inventory.
Check my work During Heaton Company's first two years of operations, It reported absorption costing net operating income as follows: Sales (@ $63 per unit) Cost of goods sold (@ $35 per unit) Gross margin Selling and administrative expenses* Year 1 $ 1, 008, 00 560, 000 448, 000 295, 000 Year 2 $ 1, 638, 00 910, 000 728, 000 325, 000 Net operating income 153, 000 403, 000 * $3 per unit variable; $247,000 fixed each year. The company's $35 unit product cost is computed as follows: Direct materials $ 5 Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($357, 000 + 21, 000 units) Absorption costing unit productlcost 10 3 17 $ 35 Production and cost data for the first two years of operations are: Year 2 21, 000 Year 1 Units produced Units sold 21, 000 16, 000 26, 000 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and…
Problem 4-19 (Algo) Variable Costing Income Statement; Reconciliation [LO4-2, LO4-3] During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@$63 per unit) Cost of goods sold (@$35 per unit) Gross margin Selling and administrative expenses* Net operating income $ Units produced Units sold $ *$3 per unit variable; $250,000 fixed each year. The company's $35 unit product cost is computed as follows: Year 1 Year 2 20,000 15,000 Year 1 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($360,000+ 20,000 units) Absorption costing unit product cost 20,000 25,000 945,000 525,000 420,000 295,000 125,000 Year 2 $ 1,575,000 875,000 700,000 325,000 375,000 $ Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings. Production and cost data for the first two years of operations are: $…
6. The Fixed and variable costs are costs classification according to: A) Cost traceability B) Value-adding C) Financial reporting Rectangular Snip 7. Cost can be conveniently and economically traced to a cost objected, For example, the salary of factory workers or the raw materials of a product. Consider as: A) Indirect Cost B) Direct Cost C) Non-of the above 8. What is the product unit cost for perfume, which consists of 1000 units and has total direct materials of 8,000 $ and direct labor of 1,500, and overhead is 4,500? A) 14 B) 9.5 C) 14,000 9. July Co. at the end of the financial, The actual overhead costs incurred were 79,950 and the amount applied to the production was 82,000. Therefore the amount of overhead cost is : A) Overapplied B) Underapplied C) None of the above
During Heaton Company's first two years of operations, It reported absorption costing net operating income as follows: Year 1 Year 2 $ Sales (@ $61 per unit) 1,159,000 1,769,000 Cost of goods sold (@ $37 per 703,000 1,073,000 unit) Gross margin Selling and administrative expenses* Net operating income *$3 per unit variable: $245,000 fixed each year. The company's $37 unit product cost is computed as follows: Direct materials Direct labor 456,000 696,000 302,000 332,000 $ 154,000 $364,000 Units produced Units sold Variable manufacturing overhead Fixed manufacturing overhead ($456,000+ 24,000 units). Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 Year 2 24,000 24,000 19,000 29,000 $7 10 1 19 $37 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and the variable costing net…
Problem 4-19 (Algo) Varlable Costing Income Statement; Reconciliation [LO4-2, L04-3] During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@$63 per unit) Cost of goods sold (@ $35 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 945,000 525,000 420,000 295,000 125,000 *$3 per unit variable: $250,000 fixed each year. The company's $35 unit product cost is computed as follows: $ Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($360,000 20,000 units) Absorption costing unit product cost Units produced Units sold Year 1 Year 2 20,000 20,000 15,000 25,000 Year 2 $ 1,575,000 875,000 700,000 325,000 375,000 $ Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings. Production and cost data for the first two years of operations are: $6…
(a) What is the customer margin under activity-based costing when the number of orders increases to 11? (Enter a loss as a negative amount.) Customer margin under activity-based costing [ ] I got $7,640 but it was not correct :( (b) What is the product margin under the traditional costing system when the number of orders increases to 11? (Enter a loss as a negative amount.) Product margin under the traditional costing system [ ] I got $(21,600) but it was not correct. :( (c) Which of the following statements are true? (You may select more than one answer.) check all that apply If a customer orders more frequently, but orders the same total number of units over the course of a year, the customer margin under activity based costing will decrease. If a customer orders more frequently, but orders the same total number of units over the course of a year, the product margin under a traditional costing system will decrease. If a customer orders more…
Gesualdo, Incorporated, manufactures and sells two products: Product Z6 and Product F4. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Product Z6 Product F4 Total direct labor-hours Product Z6 Product F4 The direct labor rate is $24.70 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit $ 101.00 $ 217.20 Activity Cost Pools Labor-related Machine setups Order size Direct Labor- Total Direct Expected Hours Per Labor- Production Unit Hours 300 8.0 2,400 600 11.0 6,600 9,000 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Activity Measures DLHs setups MHS Estimated Overhead Cost $ 98,640 18,711 388,360 $ 505,711 Expected Activity Product Z6 Product F4 2,400 6,600 500 600 3,800 3,500 Total 9,000 1,100 7,300 Which of the following…
(c2) Estimated daily production costs for April 1 using both the high-low method and the regression model and actual manufacturing costs incurred on April 1 are provided here. Units manufactured Total cost 3,897 $296,512 Estimated cost using high-low method Estimated cost using the regression model Actual cost B $300,486 $296,149 $296,512 Identify which is the most reliable approach to estimating costs and explain why. I U T₁ T' IEEE J E H 3 99 = FEB á
The following example illustrates how traditional cost accounting techniques could result in a misleading and inequitable division of costs between low-volume and high-volume products, and demonstrates that ABC may provide a more meaningful allocation of costs. Suppose that Cooplan manufactures four products, W, X, Y and Z. The direct labour cost per hour is $5. Other output and cost data for the period just ended are as follows. Number of production runs in the period Material cost Direct labour Machine per unit $4 Output units hours per unit hours per unit W 10 2 20 1 1 10 2 80 3 Y 100 5 20 1 1 100 5 80 3 14 Overhead costs 24 Expediting and scheduling costs Materials handling costs 9,100 7,700 Short-run variable costs 3,080 10,920 Set-up costs Required Prepare unit costs for each product using traditional costing and ABC.