Kelton Corp. completed its first year of operations with 1,200 units 1,200 units of inventory remaining on hand. The variable and fixed manufacturing costs per unit were $85 and $25, respectively. If Kelton uses absorption costing rather than variable (direct) costing, the result would be a higher pretax income of: a. $30,000 b. $25,000 c. $85,000 d. $102,000

Kelton Corp. completed its first year of operations with 1,200 units 1,200 units of inventory remaining on hand. The variable and fixed manufacturing costs per unit were $85 and $25, respectively. If Kelton uses absorption costing rather than variable (direct) costing, the result would be a higher pretax income of: a. $30,000 b. $25,000 c. $85,000 d. $102,000

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter13: Emerging Topics In Managerial Accounting

Section: Chapter Questions

Problem 41E: Bradshaw Company reported sales of 5,000,000 in 20X1. At the end of the fiscal year (June 30, 20X1),...

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What is the appropriate target selling price on this general accounting question?
Last year, Terrific Copying had total revenue of $475 000, while operating at 60% of capacity. The total of its variable cost is $150 000. Fixed costs were $180 000. If the current selling price, variable costs, and fixed costs are the same as last year, what net income can be expected from revenue of $500 000 in the current year Select one: A. $1 184 210 B. $346 260 C. $394 737 D. $1 418 216 E. $381 388
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The inventory ledger account of Yim Inc. shows that the level of inventory of the manufactured product has increased by 10,000 units over the period. Yim provided the following unit cost information for its manufacturing and non-manufacturing costs: Cost Information Costs Variable Fixed Manufacturing costs per unit 12.50 5.60 Selling and administrative costs per unit 5.00 2.00 Which of the following statements is true? Group of answer choices Net income will be the same under both variable and absorption costing. Net income under absorption costing will be $76,000 more than under variable costing. The difference in net income cannot be determined. Net income under variable costing will be $56,000 less than net income under absorption costing.
Smith, which began business at the start of the current year, had the following data: Planned and actual production: 40,000 units Sales: 37,000 units at $15 per unit Production costs: Variable: $4 per unit Fixed: $260,000 Selling and administrative costs: Variable: $1 per unit Fixed: $32,000 The gross margin that the company would disclose on an absorption- costing income statement is: A. $97,500. B. $147,000. C. $166,500. D. $370,000. E. some other amount.