The level of inventory of a manufactured product has increased by 8,417 units during a period. The following data are also available: Variable Fixed Unit manufacturing costs of the period $11.00 $8.00 Unit operating expenses of the period 4.00 1.00 The effect on operating income if variable costing is used rather than absorption costing would be a(n) Oa. $75,753 decrease Ob. $75,753 increase Oc. $67,336 increase Od. $67,336 decrease

The level of inventory of a manufactured product has increased by 8,417 units during a period. The following data are also available: Variable Fixed Unit manufacturing costs of the period $11.00 $8.00 Unit operating expenses of the period 4.00 1.00 The effect on operating income if variable costing is used rather than absorption costing would be a(n) Oa. $75,753 decrease Ob. $75,753 increase Oc. $67,336 increase Od. $67,336 decrease

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 3BE: Variable costingsales exceed production The beginning inventory is 52,800 units. All of the units...

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For each of the following independent situations, calculate the missing values: 1. The Belen plant purchased 78,300 of direct materials during June. Beginning direct materials inventory was 2,500, and direct materials used in production were 73,500. What is ending direct materials inventory? 2. Forster Company produced 14,000 units at an average cost of 5.90 each. The beginning inventory of finished goods was 3,422. (The average unit cost was 5.90.) Forster sold 14,120 units. How many units remain in ending finished goods inventory? 3. Beginning work in process (WIP) was 116,000, and ending WIP was 117,300. If total manufacturing costs were 349,000, what was the cost of goods manufactured? 4. If the conversion cost is 84 per unit, the prime cost is 55, and the manufacturing cost per unit is 105, what is the direct materials cost per unit? 5. Total manufacturing costs for August were 412,000. Prime cost was 64,000, and beginning WIP was 76,000. The cost of goods manufactured was 434,000. Calculate the cost of overhead for August and the cost of ending WIP.
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