1. What would the manufacturing cost per unit be under absorption costing? 2. What would the manufacturing cost per unit be under variable costing? 3. What would the net income be under absorption costing? 4. What would the net income be under variable costing?
Q: What is the difference between absorption costing and variable costing? 2. Distinguish between…
A: Cost accounting: It is a part of managerial accounting and is used to record total cost of…
Q: When units produced are less than units sold, how does operating income differ between variable…
A: Absorption Costing: "Absorption costing is a method that allocates "direct labor, direct materials,…
Q: :The change in total cost from producing another unit of output equals the following Average total…
A: The marginal cost of production is the change in total production cost that comes from making or…
Q: Questions: a. What is the net income under variable costing method? b. What is the net income…
A: The question is based on the concept of Cost Accounting.
Q: If the units produced exceed the units sold, which method would you expect to show the higher net…
A: Variable Costing: Variable Costing takes into account only variable manufacturing costs for…
Q: What effect does an increase in volume have on: Unit fixed costs? Unit variable costs? Total…
A: Increase in volume simply means the increase in production level.
Q: Explain the methods of segregating semi-variable costs into fixed and variable cost.
A: Variable cost is the cost which remains variable and fluctuate according to the level of production.…
Q: Gross margin is to absorption costing as which of the following is too variable costing? A.…
A: Variable costing uses Contribution Margin Income Statement by showing Sales – VARIABLE expenses =…
Q: 1. What is the unit product cost under absorpotion costing? 2. What is the unit product cost…
A:
Q: What is the amount of the difference between the variable costing and absorption costing net…
A: Sales 3,311,000 Variable costs Direct Materials 1,161,000…
Q: What is the effect of an increase in activity on total variable costs,variable cost per unit of…
A: Total cost refers to the cost or amount incurred by the company in production of its goods and…
Q: If the units produced exceed unit sales, which method would you expect to show the higher…
A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…
Q: Show income comparison's of absorption and variable costing?
A: Absorption costing method can be defined as the all the costs that is associated with the production…
Q: When units produced exceed units sold, how does operating income differ between variable costing and…
A: Absorption costing: Absorption costing is compulsory under Generally Accepted Accounting…
Q: Explain why there is a difference in the operating profit and operating income under the two methods…
A: The product cost in an absorption costing method includes all variable and fixed production…
Q: ow do I prepare an income statement based on variable co
A: In managerial accounting, variable costing is a cost concept. During the creation of a product…
Q: nder variable costing, which of the following costs are treated as period costs?
A: Variable costing:- It is a concept used in cost and managerial accounting. In which the fixed…
Q: In the standard cost formula Y = a + bX, what does the "Y" represent? total cost variable cost per…
A: Variable cost: Variable cost refers to that cost which gets increased with the increase in the…
Q: What could be the reason for which you can have different income figures in absorption costing and…
A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…
Q: What is the difference between absorption-costing income and variable-costing income?
A: The income statement is prepared to record the revenues and expenses of the current period.
Q: A. What is the net income under variable costing method? B. What is the net income under absorption…
A: solution : What is the net income under variable costing method? Units 10000 Sales…
Q: What is the total variable cost per unit What is the total fixed cost What is the contribution…
A: Contribution margin per unit=Revenue per unit- Variable cost per unitRevenue per unit×100
Q: Which of the following costs has no relationship with the level of output? a) Semi-variable costs.…
A: Semi variable and variable costs has a direct relationship with the level of output. Stepped fixed…
Q: Explain variable costs, fi:xed costs, average variablecosts, average fixed costs, and average total…
A: As posted multiple sub parts we are answering only first three sub parts kindly repost the…
Q: calculate the total product cost per unit under variable costing.
A: Total product cost per unit is the cost of the unit which has been incurred by the company in order…
Q: Marginal Costing refers to product costing methods that exclude ________ from product costs a)…
A: Using marginal costing, only variable costs are included in product cost.
Q: TRUE OR FALSE When units sold exceed, units produced, income under absorption costing is higher…
A: Absorption costing is the full costing method under which all the costs related to manufacturing are…
Q: Assuming that direct labor is a variable cost, the primary difference between the absorption and…
A: Major difference between absorption and variable costing is fixed cost allocation across all units…
Q: The primary difference between variable costing and absorption costing is a. in variable costing,…
A:
Q: In CPV analysis/ marginal costing, the term contribution is used. What does Contribution mean to…
A:
Q: 1. What is the net income under variable costing method? 2. What is the net income under absorption…
A: Variable costing means that inventory is valued at variable manufacturing cost and fixed cost is…
Q: . What was Product Z’s unit cost under absorption costing? 2. What was Product Z’s unit cost under…
A: Total variable manufacturing cost = Direct material + direct labor + variable manufacturing overhead…
Q: The product costs per unit under variable costing would be:
A: Variable costs are those costs that change with the change in the number of products manufactured by…
Q: On the variable costing income statement, the figure representing the difference between…
A: Variable costing income statement: Particulars Amount Sales xx Less: Cost of goods sold…
Q: Total cost is a combination of fixed and variable costs. The algebraic equation, where T =…
A: Provide the algebraic equation for total cost.
Q: Explain the impact of an increase in the level of activity (or cost driver) on (a) total variable…
A: (a)
Q: COMPUTE THE UNIT PRODUCT COST UNDER ABSORPTION COSTING 2. COMPUTE THE UNIT PRODUCT COST UNDER…
A:
Q: a. What was Product Z’s unit cost under absorption costing? b. What was Product Z’s unit cost under…
A: Absorption costing and Variable costing are two types of costing methods that are being used in the…
Q: If the units produced and unit sales are equal, which method would you expect to show the highernet…
A: Absorption costing: Absorption costing is compulsory under Generally Accepted Accounting…
Q: Give the general formula for a mixed cost. What does each term represent?
A: Given: The general formula for the mixed cost is given.
Q: Is a variable costing income statement in service operations? If so, provide a hypothetical example…
A: Variable costing income statement deducts all the variable expenses from the revenues to get the…
Q: How is Variable Costing and Absorption Costing differs from each other?
A: Hello. Since your question has multiple parts, we will solve first question for you. If you want…
Q: How do you get the variable cost per unit produced and sold?
A: Variable Cost per unit produced :To get this, we take the total of all the variable costs in the…
Q: How is operating income affected if the number of units sold exceeds the number of units produced?…
A: Under variable costing, fixed manufacturing overhead is considered as a period cost and deducted a…
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- Katayama Company produces a variety of products. One division makes neoprene wetsuits. The divisions projected income statement for the coming year is as follows: Required: 1. Compute the contribution margin per unit, and calculate the break-even point in units. Repeat, using the contribution margin ratio. 2. The divisional manager has decided to increase the advertising budget by 140,000 and cut the average selling price to 200. These actions will increase sales revenues by 1 million. Will this improve the divisions financial situation? Prepare a new income statement to support your answer. 3. Suppose sales revenues exceed the estimated amount on the income statement by 612,000. Without preparing a new income statement, determine by how much profits are underestimated. 4. How many units must be sold to earn an after-tax profit of 1.254 million? Assume a tax rate of 34 percent. (Round your answer up to the next whole unit.) 5. Compute the margin of safety in dollars based on the given income statement. 6. Compute the operating leverage based on the given income statement. (Round to three significant digits.) If sales revenues are 20 percent greater than expected, what is the percentage increase in profits?Cost-Volume-Profit, Margin of Safety Victoria Company produces a single product. Last years income statement is as follows: Required: 1. Compute the break-even point in units and sales dollars calculated using the break-even units. 2. What was the margin of safety for Victoria last year in sales dollars? 3. Suppose that Victoria is considering an investment in new technology that will increase fixed cost by 250,000 per year but will lower variable costs to 45% of sales. Units sold will remain unchanged. Prepare a budgeted income statement assuming that Victoria makes this investment. What is the new break-even point in sales dollars, assuming that the investment is made?Bethany Company has just completed the first month of producing a new product but has not yet shipped any of this product. The product incurred variable manufacturing costs of 5,000,000, fixed manufacturing costs of 2,000,000, variable marketing costs of 1,000,000, and fixed marketing costs of 3,000,000. Under the variable costing concept, the inventory value of the new product would be: a. 5,000,000. b. 6,000,000. c. 8,000,000. d. 11,000,000.
- Bolger and Co. manufactures large gaskets for the turbine industry. Bolgers per-unit sales price and variable costs for the current year are as follows: Bolgers total fixed costs aggregate to 360,000. Bolgers labor agreement is expiring at the end of the year, and management is concerned about the effects of a new labor agreement on its break-even point in units. The controller performed a sensitivity analysis to ascertain the estimated effect of a 10-per-unit direct labor increase and a 10,000 reduction in fixed costs. Based on these data, the break-even point would: a. decrease by 1,000 units. b. decrease by 125 units. c. increase by 375 units. d. increase by 500 units.A company produces two products. E and F in batches of 100 units. The production and cost data are: The company can only perform 12,000 set-ups each period yet there is unlimited demand for each product. What is the differential profit from producing product E instead of product F for the year? A. $216,000 B. $204,000 C. $12,000 D. $54,000Klamath Company produces a single product. The projected income statement for the coming year is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. 2. Suppose 10,000 units are sold above break-even. What is the operating income? 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. (Note: Round the contribution margin ratio to four decimal places, and round the sales revenue to the nearest dollar.) Suppose that revenues are 200,000 more than expected for the coming year. What would the total operating income be?
- Cost Classification, Income Statement Gateway Construction Company, run by Jack Gateway, employs 25 to 30 people as subcontractors for laying gas, water, and sewage pipelines. Most of Gateways work comes from contracts with city and state agencies in Nebraska. The companys sales volume averages 3 million, and profits vary between 0 and 10% of sales. Sales and profits have been somewhat below average for the past 3 years due to a recession and intense competition. Because of this competition, Jack constantly reviews the prices that other companies bid for jobs. When a bid is lost, he analyzes the reasons for the differences between his bid and that of his competitors and uses this information to increase the competitiveness of future bids. Jack believes that Gateways current accounting system is deficient. Currently, all expenses are simply deducted from revenues to arrive at operating income. No effort is made to distinguish among the costs of laying pipe, obtaining contracts, and administering the company. Yet all bids are based on the costs of laying pipe. With these thoughts in mind, Jack looked more carefully at the income statement for the previous year (see below). First, he noted that jobs were priced on the basis of equipment hours, with an average price of 165 per equipment hour. However, when it came to classifying and assigning costs, he needed some help. One thing that really puzzled him was how to classify his own 114,000 salary. About half of his time was spent in bidding and securing contracts, and the other half was spent in general administrative matters. Required: 1. Classify the costs in the income statement as (1) costs of laying pipe (production costs), (2) costs of securing contracts (selling costs), or (3) costs of general administration. For production costs, identify direct materials, direct labor, and overhead costs. The company never has significant work in process (most jobs are started and completed within a day). 2. Assume that a significant driver is equipment hours. Identify the expenses that would likely be traced to jobs using this driver. Explain why you feel these costs are traceable using equipment hours. What is the cost per equipment hour for these traceable costs?A company has prepared the following statistics regarding its production and sales at different capacity levels. Total costs: 1. At what point is break-even reached in sales dollars? In units? (Hint: Use the capacity level to determine the number of units.) 2. If the company is operating at 60% capacity, should it accept an offer from a customer to buy 10,000 units at 3 per unit?Maple Enterprises sells a single product with a selling price of $75 and variable costs per unit of $30. The companys monthly fixed expenses are $22,500. What is the companys break-even point in units? What is the companys break-even point in dollars? Construct a contribution margin income statement for the month of September when they will sell 900 units. How many units will Maple need to sell in order to reach a target profit of $45,000? What dollar sales will Maple need in order to reach a target profit of $45,000? Construct a contribution margin income statement for Maple that reflects $150,000 in sales volume.
- Starling Co. manufactures one product with a selling price of 18 and variable cost of 12. Starlings total annual fixed costs are 38,400. If operating income last year was 28,800, what was the number of units Starling sold? a. 4,800 b. 6,400 c. 5,600 d. 11,200Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit of $360. The companys monthly fixed expenses are $72,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of January when they will sell 500 units. How many units will Kerr need to sell in order to realize a target profit of $120,000? What dollar sales will Kerr need to generate in order to realize a target profit of $120,000? Construct a contribution margin income statement for the month of June that reflects $600,000 in sales revenue for Kerr Manufacturing.Suppose that a company is spending 60,000 per year for inspecting, 30,000 for purchasing, and 40,000 for reworking products. A good estimate of nonvalue-added costs would be a. 70,000. b. 130,000. c. 40,000. d. 90,000. e. 100,000.