Assume a company has variable manufacturing costs of $20 per unit and total fixed manufacturing overhead per period is $150,000. In its first year of theoperations, the company produced 12.500 units and sold 10,300 units and reported absorption costing net operating income of $38,000. What is the company'svariable costing net operating income in its first year of operations?Multiple Choice$27,600$47,600$21,600$11,600

Absorption costing: Absorption costing is also called traditional costing. This method of costing…

Answered: Assume a company has variable…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Assume the following information for a company that produced 10,000 units and sold 9,000 units during its first year of operations: Per Unit Per Year Selling price $ 200 Direct materials $ 69 Direct labor $ 50 Variable manufacturing overhead $ 12 Sales commission $ 8 Fixed manufacturing overhead $ 300,000 Using variable costing, what is the company's contribution margin? Multiple Choice • $549,000 • $423,000 • $351,000 • $621,000
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t 0 ences Mc Graw Hill Required information [The following information applies to the questions displayed below.] Diego Company manufactures one product that is sold for $75 per unit in two geographic regions-the East and West regions. The following information pertains to the company's first year of operations in which it produced 46,000 units and sold 42,000 units. Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense Break even point $ 25 $ 20 The company sold 31,000 units in the East region and 11,000 units in the West region. It determined that $200,000 of its fixed selling and administrative expense is traceable to the West region, $150,000 is traceable to the East region, and the remaining $38,000 is a common fixed expense. The company will continue to incur the total amount of its fixed manufacturing…
Solve only part d. Reconcile the variable costing and absorption costing income figures for each year.
Assume a company is considering buying 10,000 units of a component part rather than making them. A supplier has agreed to sell the company 10,000 units for a price of $41.25 per unit. The company's accounting system reports the following costs of making the part: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, traceable Fixed manufacturing overhead, allocated Total cost Per Unit $19 12 2 8 4 $45 10,000 Units per Year. $190,000 120,000 20,000 80,000 40,000 $450,000 One-half of the traceable fixed manufacturing overhead relates to supervisory salaries and the remainder relates to depreciation of equipment with no salvage value. If the company chooses to buy this component part from a supplier, then the supervisor who oversees its production would be discharged. What is the financial advantage (disadvantage) of buying 10,000 units from the supplier?
None
Assume the following information for the first year of operations for a company that sells only one product for a price of $48 per unit: 19 Variable cost per unit: Direct materials 25 Fixed costs per year: points Direct labor Fixed manufacturing overhead Fixed selling and administrative expenses $140,000 $200,000 $ 70,000 00:31:10 The company does not incur any variable manufacturing overhead costs or variable selling and administrative expenses. During its first y operations, the company produced 20,000 units and sold 18,000 units. The company wishes to compare a variable costing system that assigns $7.00 of direct labor cost to each unit produced with a super-varia system. Which of the following statements is true when comparing these two cost systems? Multiple Choice The variable costing net operating income will be $14,000 greater than the super-variable costing net operating Income. The variable costing net operating income will be $126,000 greater than the super-variable costing…
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