If sales are $815,000, variable costs are 73% of sales, and operating income is $260,000, what is the contribution margin ratio? a.69% b.31% c.73% d.27% The Aleutian Company produces two products, Rings and Dings. They are manufactured in two departments—Fabrication and Assembly. Data for the products and departments are listed below. Product Number ofUnits Labor HoursPer Unit Machine HoursPer Unit Rings 1,180 3 5 Dings 1,920 9 8 All of the machine hours take place in the Fabrication Department, which has an estimated overhead of $84,100. All of the labor hours take place in the Assembly Department, which has an estimated total overhead of $68,600. The Aleutian Company uses departmental overhead rates. The Fabrication Department uses machine hours for an allocation base, and the Assembly Department uses labor hours. What is the overhead cost per unit for Rings? a.$4.10 b.$29.67 c.$61.29 d.$49.26 The following production data were taken from the records of the Finishing Department for June: Inventory in process, June 1 (30% completed) 5,600 units Completed units during June 63,900 units Ending inventory (55% complete) 3,600 units What is the number of material equivalent units of production in the June 30, Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories and materials were added at the beginning of the process? a.61,900 units b.58,300 units c.67,500 units d.3,600 units
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
If sales are $815,000, variable costs are 73% of sales, and operating income is $260,000, what is the contribution margin ratio?
The Aleutian Company produces two products, Rings and Dings. They are manufactured in two departments—Fabrication and Assembly. Data for the products and departments are listed below.
Product |
Number of Units |
Labor Hours Per Unit |
Machine Hours Per Unit |
| Rings | 1,180 | 3 | 5 |
| Dings | 1,920 | 9 | 8 |
All of the machine hours take place in the Fabrication Department, which has an estimated
The Aleutian Company uses departmental overhead rates. The Fabrication Department uses machine hours for an allocation base, and the Assembly Department uses labor hours.
What is the overhead cost per unit for Rings?
The following production data were taken from the records of the Finishing Department for June:
| Inventory in process, June 1 (30% completed) | 5,600 | units |
| Completed units during June | 63,900 | units |
| Ending inventory (55% complete) | 3,600 | units |
What is the number of material equivalent units of production in the June 30, Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories and materials were added at the beginning of the process?
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