MANAGEMENT ADVISORY SERVICES VARIABLE & ABSORPTION COSTING

MANAGEMENT ADVISORY SERVICES VARIABLE & ABSORPTION COSTING CPAR Quizzer Set A SY 03-04 2nd semester, SY Set B for reconstruction Set C SY05-06 1ST semester THROUGHPUT COSTING Throughput Contribution 1 . The Glass Shop, a manufacturer of large windows, is experiencing a bottleneck in its plant. Setup time at one of its workstations has been identified as the culprit. A manager has proposed a plan to reduce setup time at a cost of $72,000. The change will result in 8,000 additional windows. The selling price per window is $18, direct labor costs are $3 per window, and the cost of direct materials is $5 per window. Assume all units produced can be sold. The change will result in an increase in the throughput contribution of (M) a. $104,000. c. $32,000. b. $80,000. d. $8,000. Horngren Cost per Unit & Throughput Contribution Questions 1 & 2 are based on the following information. Horngren Stober Company produces a specialty item. Management has provided the following information: Actual sales 60,000 units Budgeted production 50,000 units Selling price $40.00 per unit Direct material costs $10.00 per unit Variable manufacturing overhead $3.00 per unit Variable administrative costs $5.00 per unit Fixed manufacturing overhead $4.00 per unit 2 . What is the cost per statue if throughput costing is used? (E) a. $22.00 c. $15.00 b. $19.00 d. $10.00 3 . What is the total throughput contribution? (M) a. $1,500,000 c. $1,380,000 b. $1,620,000 d. $1,800,000 Questions 1 & 2 are based on the following information. Horngren Reusser Company produces wood statues. Management has provided the following information: Actual sales 80,000 statues Budgeted production 100,000 statues Selling price $20.00 per statue Direct material costs $5.00 per statue Variable manufacturing costs $1.50 per statue Variable administrative costs $2.50 per statue Fixed manufacturing overhead $2.00 per statue 4 . What is the cost per statue if throughput costing is used? (E) a. $11.00 c. $7.50 b. $9.50 d. $5.00 5 . What is the total throughput contribution? (M) a. $1,500,000 c. $720,000 b. $2,000,000 d. $1,200,000 VARIABLE COSTING – ACTUAL COSTING Sales Price per Unit 84.Simple Corp. produces a single product. The following cost structure applied to its first year of operations, 2001: Unit Variable Cost Fixed Cost SG&A $2 $14,000 Production $4 $20,000 Simple Corp. manufactured and sold 5,000 units in 2001. At this level of activity it had an income of $30,000 using variable costing. What was the sales price per unit? (E) a. $16.00 c. $12.80 b. $18.80 d. $14.80 Barfield Unit Cost Product Cost Unit costs given 6 . Peggy’s Pillows produces and sells a decorative pillow for $75.00 RPCPA, AICPA, CMA, CIA EXAMINATION QUESTIONS Page 1 of 100 MANAGEMENT ADVISORY SERVICES VARIABLE & ABSORPTION COSTING per unit. In the first month of operation, 2,000 units were produced and 1,750 units were sold. Actual fixed costs are the same as the amount budgeted for the month. Other information for the month includes: Costs per Unit Variable Cost Fixed Cost Manufacturing costs $20 $ 7 Marketing costs 3 15 What is cost of goods sold per unit using variable costing? (E) a. $20 c. $30 b. $23 d. $45 Horngren *. Cost data for a special product manufactured by Coronado, Inc. are given below: Costs per Unit Variable Cost Fixed Cost Direct materials P12.00 Direct labor 10.00 Manufacturing overhead 5.00 P12.00 Distribution 9.00 7.00 Coronado Inc. sells on the average, 300,000 units a year at P60 per unit. Using the direct costing method, the unit cost of the special product for inventory purposes is (E) a. P22 c. P27 b. P24 d. P36 RPCPA 0581 7 . The following unit costs for the production of laser guns were based on expected capacity in the coming period: Unit Variable Cost Unit Fixed Cost Direct materials $4 Direct labor 7 Overhead 2 $5 Marketing & administrative expenses 6 4 Under the direct costing method, these units are recorded in inventory at a cost of: (E) A. $11 D. $19 B. $16 E. $13 C. $18 Carter & Usry 8 . Marie’s Decorating produces and sells a mantel clock for $100 per unit. In 20x1, 100,000 parts were produced and 80,000 units were sold. Other information for the year includes: Unit Variable Cost Unit Fixed Cost Direct materials $30.00 Direct manufacturing labor 2.00 Manufacturing costs 3.00 $25.00 Sales commissions 5.00 Administrative expenses $15.00 What is the inventoriable cost per unit using variable costing? (E) a. $32 c. $40 b. $35 d. $60 Horngren 9 . Toshi Company incurred the following costs in manufacturing desk calculators: Unit Variable Cost Unit Fixed Cost Direct materials $ 7 Indirect materials 2 Direct labor 4 Indirect labor 3 Other factory overhead 5 $14 Selling expenses 10 7 During the period, the company produced and sold 1,000 units. What is the inventory cost per unit using variable costing? (E) a. $26 d. $35 b. $31 e. $52 c. $21 H & M Unit variable costs & total fixed costs given *. Compute for the inventory value under direct costing method using RPCPA, AICPA, CMA, CIA EXAMINATION QUESTIONS Page 2 of 100 MANAGEMENT ADVISORY SERVICES VARIABLE & ABSORPTION COSTING the data given – units unsold at the end of the period, 45,000; raw materials used, P6 per unit; Direct Labor, P3.00 per unit; variable overhead per unit, P2 per unit; Indirect labor for the month, P33,750. Total fixed costs, P67,500. (E) a. P16.90 c. P17.65 b. P11.00 d. P19.15 RPCPA 1091 *. Excellent Writer produces and sell boxes of signing pens for P1,000 per box. Direct materials are P400 per box and direct manufacturing labor averages P75 per box. Variable overhead is P25 per box and fixed overhead is P12,500,000 per year. Administrative expenses, all fixed, run P4,500,000 per year, with sales commissions of P100 per box. Production is expected to be 100,000 boxes, which is met every year. For the year just ended, 75,000 boxes were sold. What is the inventoriable cost per box using variable costing? (E) a. P770 c. P475 b. P500 d. P625 RPCPA 0595 75. The following data were provided by Green Enterprises for the most recent period: Variable cost per unit Fixed costs in total Production $15 $24,000 Selling and administrative 5 16,000 During this period, 8,000 units were produced and 6,000 units were sold. There were no beginning inventories. Under variable costing, the unit product cost is: (E) a. $20. c. $15. b. $18. d. $22. G & N 9e 87. The Southern Company manufactures a single product and has the following cost structure: Variable cost per unit Fixed costs in total Production $38 $140,000 Selling and administrative $14 $ 84,000 Last year, 7,000 units were produced and 6,800 units were sold. There was no beginning inventory. Under variable costing, the unit product cost would be: (E) A. $38. C. $58. B. $52. D. $70. G & N 10e 70. The Pacific Company manufactures a single product. The following data relate to the year just completed: Variable cost per unit Fixed costs in total Production $43 $145,000 Selling and administrative $15 $ 95,000 During the last year, 5,000 units were produced and 4,800 units were sold. There were no beginning inventories. Under variable costing, the unit product cost would be: (E) a. $91.00. c. $58.00. b. $72.00. d. $43.00. G & N 9e 10 . Gabe’s Auto produces and sells an auto part for $30.00 per unit. In 20x1, 100,000 parts were produced and 75,000 units were sold. Other information for the year includes: Unit Variable Cost Fixed Cost Direct materials $12.00 Manufacturing labor 2.25 Manufacturing costs 0.75 $375,000 Sales commissions 3.00 Administrative expenses $135,000 What is the inventoriable cost per unit using variable costing? (E) a. $14.25 c. $18.00 b. $15.00 d. $21.75 Horngren 57. Aaron Company, which has only one product, has provided the following data concerning its most recent month of operations: RPCPA, AICPA, CMA, CIA EXAMINATION QUESTIONS Page 3 of 100 MANAGEMENT ADVISORY SERVICES VARIABLE & ABSORPTION COSTING Units sold @ $90 per unit 3,000 Units produced 3,400 Beginning inventory 0 Costs Variable Cost Fixed Cost Direct materials $21 Direct labor 38 Manufacturing overhead 6 $54,400 Selling and administrative expenses 4 3,000 What is the unit product cost for the month under variable costing? (E) A. $69 C. $85 B. $65 D. $81 G & N 10e 65. Farris Company, which has only one product, has provided the following data concerning its most recent month of operations: Units sold @ $78 per unit 8,700 Units produced 8,800 Beginning inventory 0 Costs Variable Cost Fixed Cost Direct materials $18 Direct labor 10 Manufacturing overhead 4 $255,200 Selling and administrative expenses 5 87,000 What is the unit product cost for the month under variable costing? (E) A. $61 C. $32 B. $37 D. $66 G & N 10e 68. Iancu Company, which has only one product, has provided the following data concerning its most recent month of operations: Units sold @ $149 per unit 3,900 Units produced 4,200 Beginning inventory 0 Costs Variable Cost Fixed Cost Direct materials $27 Direct labor 46 Manufacturing overhead 5 $155,400 Selling and administrative expenses 9 70,200 What is the unit product cost for the month under variable costing? (E) a. $124 c. $78 b. $115 d. $87 G & N 9e 64. Hatfield Company, which has only one product, has provided the following data concerning its most recent month of operations: Units sold @ $123 per unit 6,100 Units produced 6,400 Beginning inventory 0 Costs Variable Cost Fixed Cost Direct materials $45 Direct labor 30 Manufacturing overhead 1 $140,800 Selling and administrative expenses 8 91,500 What is the unit product cost for the month under variable costing? (E) a. $98 c. $76 b. $84 d. $106 G & N 9e 56. Farron Company, which has only one product, has provided the following data concerning its most recent month of operations: Units sold @ $92 per unit 8,300 Units produced 8,700 Beginning inventory 0 Costs Variable Cost Fixed Cost Direct materials $13 RPCPA, AICPA, CMA, CIA EXAMINATION QUESTIONS Page 4 of 100 MANAGEMENT ADVISORY SERVICES VARIABLE & ABSORPTION COSTING Direct labor 55 Manufacturing overhead 1 $130,500 Selling and administrative expenses 5 8,300 What is the unit product cost for the month under variable costing? (E) a. $69 c. $89 b. $84 d. $74 G & N 9e 90. Baughn Company, which has only one product, has provided the following data concerning its most recent month of operations: Units sold @ $115 per unit 6,400 Units produced 6,600 Beginning inventory 0 Costs Variable Cost Fixed Cost Direct materials $26 Direct labor 46 Manufacturing overhead 7 $105,600 Selling and administrative expenses 9 51,200 What is the unit product cost for the month under variable costing? (E) A. $104 C. $88 B. $79 D. $95 G & N 10e 81. Bateman Company, which has only one product, has provided the following data concerning its most recent month of operations: Units sold @ $117 per unit 4,400 Units produced 4,700 Beginning inventory 0 Costs Variable Cost Fixed Cost Direct materials $36 Direct labor 38 Manufacturing overhead 4 $89,300 Selling and administrative 1 26,400 expenses What is the unit product cost for the month under variable costing? (E) a. $89 c. $108 b. $97 d. $78 G & N 9e 81. Bateman Company, which has only one product, has provided the following data concerning its most recent month of operations: Units sold @ $117 per unit 4,400 Units produced 4,700 Beginning inventory 0 Costs Variable Cost Fixed Cost Direct materials $36 Direct labor 38 Manufacturing overhead 4 $89,300 Selling and administrative expenses 1 26,400 What is the unit product cost for the month under variable costing? (E) a. $89 c. $108 b. $97 d. $78 G & N 9e 42. Aaker Company, which has only one product, has provided the following data concerning its most recent month of operations: Units sold @ $99 per unit 6,000 Units produced 6,300 Beginning inventory 0 Costs Variable Cost Fixed Cost Direct materials $12 Direct labor 42 Manufacturing overhead 6 $170,100 Selling and administrative expenses 6 24,000 What is the unit product cost for the month under variable costing? (E) RPCPA, AICPA, CMA, CIA EXAMINATION QUESTIONS Page 5 of 100 MANAGEMENT ADVISORY SERVICES VARIABLE & ABSORPTION COSTING a. $66 c. $87 b. $93 d. $60 G & N 9e 36.A manufacturing company has provided the following data concerning its most recent month of operations: Units sold 3,900 Units produced 4,000 Beginning inventory 0 Costs Variable Cost Fixed Cost Direct materials $41 Direct labor 43 Manufacturing overhead 6 $84,000 Selling & administrative expenses 4 39,000 What is the unit product cost for the month under variable costing? (E) A. $94 C. $90 B. $115 D. $111 G & N 10e 37.A manufacturing company has provided the following data concerning its most recent month of operations: Units sold 8,500 Units produced 8,900 Beginning inventory 0 Costs Variable Cost Fixed Cost Direct materials $26 Direct labor 25 Manufacturing overhead 4 $249,200 Selling and administrative expenses 4 17,000 What is the unit product cost for the month under variable costing? (E) A. $59 C. $87 B. $83 D. $55 G & N 10e 85. Ing Company, which has only one product, has provided the following data concerning its most recent month of operations: Units sold @ $159 per unit 7,700 Units produced 7,800 Beginning inventory 0 Costs Variable Cost Fixed Cost Direct materials $47 Direct labor 50 Manufacturing overhead 2 $304,200 Marketing and General Expenses 9 84,700 What is the unit product cost for the month under variable costing? (E) A. $99 C. $108 B. $