La Lisa uses FIFO for inventory costing: Beginning Inventory 300 units Units Produced 600 Units Sold 600 Prior year Budgeted Fixed Overhead Rate P 50/unit Current year Budgeted Fixed Overhead Rate P 44/unit Which of the following statements is true about the difference between absorption-costing and variable-costing operating income? Absorption-costing is P 1,800 less than variable-costing operating income. Absorption-costing is P 1,800 more than variable-costing operating income. Absorption-costing is P 15,000 less than variable-costing operating income. Absorption-costing is P 15,000 more than variable-costing operating income.

La Lisa uses FIFO for inventory costing: Beginning Inventory 300 units Units Produced 600 Units Sold 600 Prior year Budgeted Fixed Overhead Rate P 50/unit Current year Budgeted Fixed Overhead Rate P 44/unit Which of the following statements is true about the difference between absorption-costing and variable-costing operating income? Absorption-costing is P 1,800 less than variable-costing operating income. Absorption-costing is P 1,800 more than variable-costing operating income. Absorption-costing is P 15,000 less than variable-costing operating income. Absorption-costing is P 15,000 more than variable-costing operating income.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 31BEB: Inventory Valuation under Variable Costing Refer to the data for Pelham Company on the previous...

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Variable Costing, Absorption Costing During its first year of operations, Snobegon, Inc. (located in Lake Snobegon, Minnesota), produced 40,900 plastic snow scoops. Snow scoops are oversized shovel-type scoops that are used to push snow away. Unit sales were 38,900 scoops. Fixed overhead was applied at $0.75 per unit produced. Fixed overhead was underapplied by $2,900. This fixed overhead variance was closed to Cost of Goods Sold. There was no variable overhead variance. The results of the year's operations are as follows (on an absorption-costing basis): Sales (38,900 units @ $20) $778,000 Less: Cost of goods sold 547,260 Gross margin $230,740 Less: Selling and administrative expenses (all fixed) 184,500 Operating income $ 46,240 Required: 1. Calculate the cost of the firm's ending inventory under absorption costing. Round unit cost to five decimal places. Round your final answer to the nearest dollar. %24 What is the cost of the ending inventory under variable costing? Round unit…
AVERAGE AND FIFO COSTING TRUE OF FALSE Indicate whether the following statements are true of false by inserting in the blank space provided a capital “T" for true of “F” for false. Using the FIFO method: If, for any period, the beginning Finished Goods Inventory is zero, then the average ending unit cost in Finished Goods Inventory is either a number between the unit cost in the beginning WIP inventory and the current period unit costs, or it is equal to the current period unit cost. Using the FIFO method: If the units transferred out exceeds the equivalent units in WIP beginning inventory, then the unit cost of the ending WIP inventory will equal the current period unit cost. Using the FIFO method: If the beginning WIP inventory is zero, then the unit cost of units transferred out will always equal the unit costs of the units in ending WIP inventory. Using the FIFO method: The number of units transferred out equals the number of units started and completed plus the equivalent units…
5. Under 75% sale assumption, using absorption costing, the ending inventory balance is? 6. Under 75% sale assumption, using variable costing, the ending inventory balance is? 7. Under 75% sale assumption, using variable costing, the ending inventory balance can be calculated by: (150,000 + 75.000+ 25,000) x 25%a) True b) False
The following information applies to Swifty Corporation: Beginning Inventory Ending Inventory Units produced Direct labor per unit Direct materials per unit Variable manufacturing overhead per unit Fixed manufacturing overhead per unit Variable operating expenses per unit Fixed operating expenses 0 Units O $55. O $87. O $45. O $58. 4160 units 41600 units $23 $16 $6 $13 $10 $80600 Using absorption costing, how much will the per unit product cost be?
1. Under the absorption costing method, NUBD’s operating income for 2021 would be 2. What would be NUBD’s finished inventory cost at December 31, 2021 under the variable costing method?
Considering the data given above, under variable costing and absorption costing, ending inventory would be valued at: Assuming sales price per unit is ₱15, under variable costing and absorption costing, net operating income would be:
A firm uses backflush costing and values inventory using throughput accounting. All cost and unit figures below are equal to budgeted amounts. Total DM 100000 Total DL 90000 Total OH 70000 Units produced 20000 Units sold 19580 Units in process 100 Which journal entry appropriately backflushes costs to inventory accounts?
The VARCOST2 worksheet is capable of calculating variable and absorption income when unit sales are equal to or less than production. An equally common situation (that this worksheet cannot handle) is when beginning inventory is present and sales volume exceeds production volume. Revise the worksheet Data Section to include: Beginning inventory in units 15,000 Beginning inventory cost (absorption) $266,875 Beginning inventory cost (variable) $210,000, Also, change actual production to 70,000. Revise the Answer Section to accommodate this new data. Assume that Anderjak uses the weighted-average costing method for inventory. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Check figure: Absorption income, $670,000.
By using the information given below calculate the net income under the traditional costing method. Show your calculations. (No beginning finished goods inventory.) Variable cost of goods sold per unit Fixed cost of goods sold per unit Variable operating expenses per unit Fixed operating expenses per unit Selling price Number of units sold Number of units produced 18,000 20,000 $4.00 $ 3.00 $1.50 $1.25 $12.00
The following information is for Lawrence Company, who uses the LIFO method: Item Cost NRV MinusNormal Profit Net RealizableValue ReplacementCost a $3.40 $2.79 $4.14 $4.65 b 36.00 28.80 32.40 27.60 c 2.40 1.32 1.56 1.94 d 6.00 5.55 6.15 6.30 e 24.00 20.40 22.80 21.00 f 13.35 10.55 12.30 12.90 1. Determine the lower of cost or market for each inventory item. Item Lower ofCost or Market Value a $ b $ c $ d $ e $ f $ 2. Now assume instead that the company uses FIFO and the inventory is valued using the LCNRV rule, determine the value of each inventory item. Item Lower ofCost or Net Realizable Value a $ b $ c $ d $ e $ f $
The following data relates to component L512: Ordering costs $100 per order Inventory holding costs $8 per unit per annum Annual demand 1,225 units What is the economic order quantity (to the nearest whole unit)?
For each of the following cost flow assumptions, calculate cost of goods sold, ending inventory, and gross profit. (1) LIFO. (2) FIFO. (3) Moving-average cost. (Round average-cost per unit to 3 decimal places, e.g. 12.502 and final answer to 0 decimal places, e.g. 1,250.) LIFO FIFO Moving-average 4852 $ 4590 SA $ 2748 $ 3090 Cost of goods sold 4852 $ Ending inventory $ 2828 Gross profit $ 2746 GA $ 2746 $ 3008