Which costing method, absorption or variable, would show higher operating income and by what amount? A. Absorption costing, P2,500 B. Variable costing, P2,500 C. Absorption costing, P5,500 D. Variable costing, P5,500
Q: Variable selling expenses are a. Product costs under variable costing but period costs under…
A: The correct answer is Option (a).
Q: When units sold exceeds, units produced, basis a. net income under absorption costing is higher than…
A: Absorption is an important method of costing in Accounting System. It refers to those costs which…
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: Using variable costing, what is the unit product cost for both years? 2. What is the variable…
A: Variable costing income statement represents the contribution margin of the company by deducting…
Q: The left column lists several cost classifications. The right column presents short definitions of…
A: Fixed Cost: Fixed cost refers the cost which remains constant for particular time duration and there…
Q: What type of cost exhibits the behavior shown below? Manufacturing Volume (Units) Cost Per Unit…
A: Fixed costs are those cost which do not change with the change in level of activity.
Q: Consider the following statements about absorption costing and variable costing: Variable costing…
A: Absorption costing and variable costing are managerial accounting and financial reporting cost…
Q: What is target cost per unit? Question content area bottom
A: Target cost is the cost which is sufficient to develop specified functionality and quality of a…
Q: When the number of units sold exceed the number of units produced, income reported under absorption…
A: Fixed overhead costs include those costs which shall not vary with the production output. In…
Q: 1. The total variable costs charged to expense for the year, assuming that NUBD uses variable…
A: Solution:- 1)Calculation of total variable costs charged to expense for the year, assuming that NUBD…
Q: Within a relevant range, costs that increase in direct proportion to volume are: Question 9…
A: Variable costs are proportional to the level of output within a relevant range. On the other hand,…
Q: When will NOI under the variable costing method show higher income than under the absorption costing
A: Net Operating Income: It is a calculation used to assess the profitability of the business.
Q: When company reduced its inventories to zero, then • Variable costing income > Absorption costing…
A: Variable cost means the cost which vary with the level of output where the fixed cost means the cost…
Q: a) Determine the variable cost per unit and the fixed cost using the high-low method. b) What is the…
A: High-low method: The high-low method considers only two data points, that is, the highest point and…
Q: Please define and give formula of the following (if there is any): 1. Absorption costing 2. Activity…
A: "Hey, since there are multiple questions posted, we will answer the first question. If you want any…
Q: When comparing absorption costing with variable costing, which of the following statements is not…
A: Absorption costing is that method of costing, in which all total costs (fixed and variable) are…
Q: When company reduced its inventories to zero, then a) Variable costing income > Absorption costing…
A: The difference between absorption costing income and variable costing income arises due to the…
Q: (c) Describe a situation where net profit under variable costing is higher than absorption JIT…
A: Variable costing is a costing method in which overhead is incurred in the period of production of…
Q: Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the…
A: The variable costing method is a method where only variable costs are taken into consideration…
Q: The net income under variable costing would be: * a. P64,000 b. P60,000 c. P56,000 d. P52,000…
A: Fixed production cost per unit = total fixed production cost / units produced = 48000/12000 = P4 per…
Q: Variable costs are costs that: Select one: a. Neither of the above b. vary in total directly and…
A: Variable costs is one of the one of the component of the total cost. Variable cost is the cost which…
Q: True or False Product cost under Variable costing are DM, DL and VOH only. Under absorption…
A: Solution:- Discussions of above statements as follows under:-
Q: o. Reconcile the variable costing income from operations of $357,500 with the absorption costing…
A: The question is based on the concept of Cost Accounting.
Q: Product costs under variable costing are typically: Question 1 options: lower than under…
A: As per the variable costing method, only variable cost is considered as the product cost while in…
Q: Relevant of differential cost analysis takes all variable and fixed costs into account to analyze…
A: Differential cost analysis is the difference in cost for every alternative which helps in making the…
Q: Inventory values calculated using variable costing as opposed to absorption costing will generally…
A: Inventory is referred to as current asset which includes raw materials, work in process inventory…
Q: the operating incomes from absorption costing and variable costing are the same when A. Units…
A: Absorption Costing and Variable Costing are the two methods of ascertaining cost and determining…
Q: A range of costing methods have been considered in the module. Which of the following statements is…
A: Following is the answer to the given question
Q: Based on the image below for a manufacturing company, the correct statement is A. line b graphs…
A:
Q: 15. An income statement is prepared as an external report. Under which of the following would the…
A: Since you have asked multiple questions, we will solve the first question for you. If youwant any…
Q: Fixed overhead costs that will continue regardless of a make-or-buy decision are ________ to the…
A: It is pertinent to note that fixed cost is the cost irrespective of the level of activity. Example…
Q: ?Refer to CASE 2 (Company B), What is the expected Product Margin of product Z if activity-based…
A: The product margin is calculated as difference between sales revenue and total costs incurred during…
Q: Chapter 3- CVP Cost-volume-profit (CVP) analysis requires an understanding of cost behavior:…
A: Break Even Sales - It is the situation where the company's total cost equals to the its total…
Q: An increase in of $1,000 in fixed selling overheads will affect the net profit reported under…
A: c) Decrease net profit equally in both absorption and marginal costing
Q: Which of the following statements is true? a. When production is greater than sales, operating…
A: The question is based on the concept of Cost Accounting.
Q: The objective of management, under absorption costing, is that each product recovers its full cost…
A: The management is interested in that product which is giving profit in return on investment.it means…
Q: If unit costs remain unchanged and sales volume and sales price per unit both increase from the…
A: Operating profit is the total income from operations before taxes. The revenue and the money spent…
Q: This best accounts for the difference in profit between the absorption and variable costing *…
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Q: Required: 1. Assume that the company uses absorption costing. Compute the unit product cost for one…
A: Solution:- 1)Calculation of Unit Product cost under absorption costing a follows under:- Note:-…
Q: Under variable costing: a. Net operating income will always be higher than under absorption costing.…
A: Under variable costing, the inventory cost is valuate on the basis of variable manufacturing cost…
Q: When production exceeds sales, a. Ending inventory under variable costing will exceed ending…
A: Option no. (b) is correct.
Q: Required: 1. Complete the following: a. Compute the unit product cost under absorption costing. p.…
A: Solution 1a: Computation of Unit Product Cost - Absorption Costing Particulars Q1 Q2 Unit…
Q: The net income under variable costing would be: * a. P64,000 b. P60,000 c. P56,000 d. P52,000…
A: Fixed production cost per unit = total fixed production cost / units produced = 48000/12000 = P4 per…
Q: Under absorption costing, how is it possible to increase net operating income without increasing…
A: Absorption costing refers to a technique of costing to account for all the prices of manufacturing.…
Q: When units produced are less than units sold, income under absorption costing is higher than income…
A: The income statement can be prepared using various methods as variable costing and absorption…
Q: The high-low method: a. Calculates variable costs per unit by dividing the difference in the high…
A: The high-low method is a method to separate or segregate the fixed and variable cost portions of a…
Q: Over extended periods of time, the net income figures reported under absorption costing will be: a.…
A: Under absorption costing, unit cost is calculated on the basis of total cost including fixed and…
Which costing method, absorption or variable, would show higher operating income and by what amount?
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- Selected information concerning the operations of a company for the year ended December 31 is as follows: Work in process inventories at the beginning and end of the year were zero. Beginning inventory of finished goods was 9,650 (for 1,000 units). Cost of goods sold was 174,600. What was the companys finished goods inventory cost at December 31? a. 98,050 b. 29,100 c. 29,050 d. 40,600SCHEDULE OF COST OF GOODS MANUFACTURED The following information is supplied for Maupin Manufacturing Company. Prepare a schedule of cost of goods manufactured for the year ended December 31, 20--. Assume that all materials inventory items are direct materials. Work in process, January 1 77,000 Materials inventory, January 1 31,000 Materials purchases 35,000 Materials inventory, December 31 26,000 Direct labor 48,000 Overhead 20,000 Work in process, December 31 62,000During the year, a company purchased raw materials of $77,321 and incurred direct labor costs of $125,900. Overhead Is applied at the rate of 75% of the direct labor cost. These are the inventory balances: Compute the cost of materials used in production, the cost of goods manufactured, and the cost of goods sold.
- Glasson Manufacturing Co. produces only one product. You have obtained the following information from the corporations books and records for the current year ended December 31, 2016: a. Total manufacturing cost during the year was 1,000,000, including direct materials, direct labor, and factory overhead. b. Cost of goods manufactured during the year was 970,000. c. Factory Overhead charged to Work in Process was 75% of direct labor cost and 27% of the total manufacturing cost. d. The beginning Work in Process inventory, on January 1, was 40% of the ending Work in Process inventory, on December 31. e. Material purchases were 400,000 and the ending balance in Materials inventory was 60,000. No indirect materials were used in production. Required: Prepare a statement of cost of goods manufactured for the year ended December 31 for Glasson Manufacturing. (Hint: Set up a statement of cost of goods manufactured, putting the given information in the appropriate spaces and solving for the unknown information.)SCHEDULE OF COST OF GOODS MANUFACTURED The following information is supplied for Sanchez Welding and Manufacturing Company. Prepare a schedule of cost of goods manufactured for the year ended December 31, 20--. Assume that all materials inventory items are direct materials. Work in process, January 1 20,500 Materials inventory, January 1 11,000 Materials purchases 12,000 Materials inventory, December 31 13,000 Direct labor 9,500 Overhead 5,500 Work in process, December 31 10,500During March, the following costs were charged to the manufacturing department: $14886 for materials; $14,656 for labor; and $13,820 for manufacturing overhead. The records show that 30,680 units were completed and transferred, while 2,400 remained in ending inventory. There were 33,080 equivalent units of material and 31,640 of conversion costs. Using the weighted-average method, what is the cost of inventory transferred and the balance in work in process inventory?
- The following data summarize the operations during the year. Prepare a journal entry for each transaction. A. Purchase of raw materials on account: $1,500 B. Raw materials used by Job 1: $400 C. Raw materials used as indirect materials: $50 D. Direct labor for Job 1: $200 E. Indirect labor Incurred for Job 1: $30 F. Factory utilities Incurred on account: $500 G. Adjusting entry for factory depreciation: $200 H. Manufacturing overhead applied as percent of direct labor: 100% I. Job 1 is transferred to finished goods J. Job 1 is sold: $1,000 K. Manufacturing overhead is under applied: $100OReilly Manufacturing Co.s cost of goods sold for the month ended July 31 was 345,000. The ending work in process inventory was 90% of the beginning work in process inventory. Factory overhead was 50% of the direct labor cost. No indirect materials were used during the period. Other information pertaining to OReillys inventories and production for July is as follows: Required: 1. Prepare a statement of cost of goods manufactured for the month of July. (Hint: Set up a statement of cost of goods manufactured, putting the given information in the appropriate spaces and solving for the unknown information. Start by using cost of goods sold to solve for the cost of goods manufactured.) 2. Prepare a schedule to compute the prime cost incurred during July. 3. Prepare a schedule to compute the conversion cost charged to Work in Process during July.On December 1, Carmel Valley Production Inc. had a work in process inventory of 1,200 units that were complete as to materials and 50% complete as to labor and overhead. December 1 costs follow: During December the following transactions occurred: a. Purchased materials costing 50,000 on account. b. Placed direct materials costing 49,000 into production. c. Incurred production wages totaling 50,500. d. Incurred overhead costs for December: e. Applied overhead to work in process at a predetermined rate of 125% of direct labor cost. f. Completed and transferred 10,000 units to finished goods. (Hint: You should first compute equivalent units and unit costs. The unit cost should include applied, not actual, factory overhead.) Carmel Valley uses the weighted average cost method. The ending inventory of work in process consisted of 1,000 units that were completed as to materials and 25% complete as to labor and overhead. Required: Prepare the journal entries to record the above December transactions.
- Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Required: 1. Calculate the total cost of direct materials used in production. 2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost. 3. Of the unit manufacturing cost calculated in Requirement 2, 2.70 is direct materials and 5.30 is overhead. What is the prime cost per unit? Conversion cost per unit?Selected account balances and transactions of Titan Foundry Inc. follow: May Transactions: a. Purchased raw materials and factory supplies on account at costs of 45,000 and 10,000, respectively. (One inventory account is maintained.) b. Incurred wages during the month of 65,000 (15,000 was for indirect labor). c. Incurred factory overhead costs in the amount of 42,000 on account. d. Made adjusting entries to record 10,000 of factory overhead for items such as depreciation (credit Various Credits). Factory overhead was closed to Work in Process. Completed jobs were transferred to Finished Goods, and the cost of jobs sold was charged to Cost of Goods Sold. Required: Prepare journal entries for the following: 1. The purchase of raw materials and factory supplies. 2. The issuance of raw materials and supplies into production. (Hint: Be certain to consider the beginning and ending balances of raw materials and supplies as well as the amount of the purchases.) 3. The recording of the payroll. 4. The distribution of the payroll. 5. The payment of the payroll. 6. The recording of factory overhead incurred. 7. The adjusting entry for factory overhead. 8. The entry to transfer factory overhead costs to Work in Process. 9. The entry to transfer the cost of completed work to Finished Goods. (Hint: Be sure to consider the beginning and ending balances of Work in Process as well as the manufacturing costs added to Work in Process this period.) 10. The entry to record the cost of goods sold. (Hint: Be sure to consider the beginning and ending balances of Finished Goods as well as the cost of the goods finished during the month.)Coops Stoops estimated its annual overhead to be $85,000 and based its predetermined overhead rate on 24,286 direct labor hours. At the end of the year, actual overhead was $90,000 and the total direct labor hours were 24,100. What is the entry to dispose of the over applied or under applied overhead?