Excel Applications for Accounting Principles
4th Edition
ISBN: 9781111581565
Author: Gaylord N. Smith
Publisher: Cengage Learning
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Chapter 19, Problem 4R
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.
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The following diagram is a cost-volume-profit graph for a manufacturing company:
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O
Volume
с
Select the answer that best describes the labeled item on the diagram.
A. Area CDE represents the area of net loss.
B. Line AC graphs total fixed costs.
C. Point D represents a point at which the profit is greater than zero.
D. Line AC graphs total costs.
How is operating income affected if the number of units sold exceeds the number of units produced?
Select one:
a. Operating income would be higher under a variable costing income statement.
b. Operating income would be lower under a variable costing income statement.
c. Operating income would be higher under an absorption costing income statement.
d. Operating income would be the same under both a variable costing and absorption costing income
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Fill in the missing amounts in each of the eight case situations below. Each case is independent of the others. ( Hint: One way to find the missing amounts would be to prepare a contribution format income statement for each case, enter the known data, and then compute the missing items.)a. Assume that only one product is being sold in each of the four following case situations:Contribution Net OperatingUnits Variable Margin Fixed IncomeCase Sold Sales Expenses per Unit Expenses (Loss)1 .......... 15,000 $180,000 $120,000 ? $50,000 ?2 .......... ? $100,000 ? $10 $32,000 $8,0003 .......... 10,000 ? $70,000 $13 ? $12,0004 .......... 6,000 $300,000 ? ? $100,000 $(10,000)
Chapter 19 Solutions
Excel Applications for Accounting Principles
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