ACCOUNTING-The amount of income under absorption costing will equal the amount of income

Question 4

The amount of income
under absorption costing will equal the amount of income under variable costing
when units manufactured:

		exceed units sold
		are less than units sold
		equal units sold
		are equal to or greater than units sold

Question 5

1.

The level of inventory
of a manufactured product has increased by 7,000 units during a period. The
following data are also available:

	Variable	Fixed
Unit manufacturing costs of the period	$12.00	$6.00
Unit operating expenses of the period	4.00	1.50

What
would be the effect on income from operations if absorption costing is used
rather than variable costing?

		$42,000 decrease
		$42,000 increase
		$52,500 increase
		$52,500 decrease

Question 6

1.

A business operated at
100% of capacity during its first month and incurred the following costs:

Production costs (20,000 units):
Direct materials	$180,000
Direct labor	240,000
Variable factory overhead	280,000
Fixed factory overhead	100,000	$800,000
Operating expenses:
Variable operating expenses	$130,000
Fixed operating expenses	50,000	180,000

If 1,600 units remain
unsold at the end of the month, what is the amount of inventory that would be
reported on the variable costing balance sheet?

		$64,000
		$56,000
		$66,400
		$78,400

Question 7

1.

A business operated at
100% of capacity during its first month and incurred the following costs:

Production costs (10,000 units):
Direct materials	$140,000
Direct labor	40,000
Variable factory overhead	20,000
Fixed factory overhead	4,000	$204,000
Operating expenses:
Variable operating expenses	$ 34,000
Fixed operating expenses	2,000	36,000

If 2,000 units remain
unsold at the end of the month and sales total $300,000 for the month, what
would be the amount of income from operations reported on the variable costing
income statement?

		$100,800
		$100,000
		$114,800
		$140,000

Question 8

1.

A business operated at
100% of capacity during its first month and incurred the following costs:

Production costs (10,000 units):
Direct materials	$140,000
Direct labor	40,000
Variable factory overhead	20,000
Fixed factory overhead	4,000	$204,000
Operating expenses:
Variable operating expenses	$ 34,000
Fixed operating expenses	2,000	36,000

If 2,000 units remain
unsold at the end of the month and sales total $300,000 for the month, what is
the amount of the manufacturing margin that would be reported on the variable
costing income statement?

		$104,000
		$106,000
		$140,000
		not reported

Question 14

Jase Manufacturing
Co.’s static budget at 10,000 units of production includes $40,000 for direct
labor and $4,000 for electric power. Total fixed costs are $24,000. At 12,000
units of production, a flexible budget would show

		variable costs of $52,800 and $29,000 of fixed costs
		variable costs of $44,000 and $24,000 of fixed costs
		variable costs of $52,800 and $24,000 of fixed costs
		variable and fixed costs totaling $68,000

Question 15

At the beginning of the period, the Assembly Department budgeted
direct labor of $110,000, direct materials of $170,000, and fixed factory
overhead of $28,000 for 8,000 hours of production. The department actually
completed 10,000 hours of production. What is the appropriate total budget for
the department, assuming it uses flexible budgeting?

		$378,000
		$305,000
		$350,000
		$288,000

Question 17

1.

Motorcycle
Manufacturers, Inc. projected sales of 78,000 machines for the year. The
estimated January 1 inventory is 6,500 units, and the desired December 31
inventory is 6,000 units. What is the budgeted production (in units) for the
year?

		78,500
		77,500
		70,000
		70,500

Question 18

Below is budgeted production and sales information for Flushing
Company for the month of December:

	Product XXX	Product ZZZ
Estimated beginning inventory	32,000 units	20,000 units
Desired ending inventory	34,000 units	17,000 units
Region I, anticipated sales	320,000 units	260,000 units
Region II, anticipated sales	180,000 units	140,000 units

The unit selling price
for product XXX is $5 and for product ZZZ is $15.

Budgeted sales for the
month are

		$3,180,000
		$5,820,000
		$1,800,000
		$8,500,000

Question 20

Stephanie Corporation
sells a single product. Budgeted sales for the year are anticipated to be
640,000 units, estimated beginning inventory is 108,000 units, and desired
ending inventory is 90,000 units. The quantities of direct materials expected
to be used for each unit of finished product are given below.

Material A 0.50 lb. per unit @ $0.70 per pound

Material B 1.00 lb. per unit @ $1.70 per pound

Material C 1.20 lb.
per unit @ $1.00 per pound

The dollar amount of
material A used in production during the year is

		$217,700
		$528,700
		$311,000
		$224,600

Question 21

Consider Derek’s
budget information: materials to be used totals $64,750; direct labor totals
$198,400; factory overhead totals $394,800; work in process inventory January
1, $189,100; and work in progress inventory on December 31, $197,600. What is
the budgeted cost of goods manufactured for the year?

		$649,450
		$657,950
		$197,600
		$1,044,650

4 points

Question 22

Production and sales estimates for April are as follows:

Estimated inventory (units), April	19,000
Desired inventory (units), April 30	18,000
Expected sales volume (units):
Area A	3,000
Area B	4,750
Area C	4,250
Unit sales price	$20

The
number of units expected to be manufactured in April is

		11,000
		9,500
		12,000
		13,000