McArthur Corp., which began business at the start of the current year, had the following data: Planned and actual production: 40,000 units Sales: 38,000 units at $15 per unit Production costs: Variable: $5 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. $0 b. $133,000 c. $166,500 d. $342,000

McArthur Corp., which began business at the start of the current year, had the following data: Planned and actual production: 40,000 units Sales: 38,000 units at $15 per unit Production costs: Variable: $5 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. $0 b. $133,000 c. $166,500 d. $342,000

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

Chapter8: Tactical Decision-making And Relevant Analysis

Section: Chapter Questions

Problem 11MCQ: Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett...

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The following data were taken from the first year absorption based accounting records of Stan Corp.. Total fixed costs incurred, P100,000 Total variable costs incurred, P50,000 Total period costs incurred, P70,000 Total variable period costs incurred, P30,000 Units produced, 20,000 Units sold, 12,000 Unit sales price, P 12.00 If Stan Corp had used variable costing in first year of operations, how much income/loss before tax would it have reported?
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Company A has the following documents: - Unit production cost 1,000 VND/product (including variable production cost 800 VND/product); - Sales and corporate management expenses are 500 VND/item (in which variable sales and corporate management costs are 120 VND/item); - Production level in the period is 2,000 products; Consumption during the period is 1,500 products. Total fixed costs for the period are (note that production prices are calculated based on production level, selling costs are calculated based on consumption level): a. 970.000₫ b. 870.000 d 1.060.000₫ d. 1.160.000₫
Farrow Company reports the following annual results. Contribution Margin Income Statement Sales (440,000 units) Variable costs Direct materials Direct labor Overhead Contribution margin. Fixed costs Fixed overhead Fixed general and administrative Income Per Unit $15.00 2.00 4.00 2.50 6.50 2.00 1.50 $ 3.00 (a) Compute the income or loss for the special offer. (b) Should the company accept or reject the special offer? Required A Required B Annual Total $ 6,600,000. 880,000 1,760,000 1,100,000 2,860,000 The company receives a special offer for 44,000 units at $12 per unit. The additional sales would not affect its normal sales. Variable costs per unit would be the same for the special offer as they are for the normal units. The special offer would require incremental fixed overhead of $176,000 and incremental fixed general and administrative costs of $189,000. 880,000 660,000 $ 1,320,000 Complete this question by entering your answers in the tabs below.
KALIBO CORP. prepared the following absorption-costing income statement for the year ended May 31, 2019 Sales (16,000 units) Cost of goods sold Gross margin Selling and administrative expenses Operating income Additional information follows: Selling and administrative expenses include P1.50 of variable cost per unit sold. There was no beginning inventory, and 17,500 units were produced. Variable manufacturing costs were P11 per unit. Actual fixed costs were equal to budgeted fixed costs. REQUIREMENT: Prepare a variable-costing income statement for the same period. P 320,000 216.000 P104,000 46.000 P 58,000 Absorption Costing Income Statement (Conversion from Variable Net Income) 4. LEGAZPI COMPANY manufactures and sells premium tomato juice by the gallon. LEGAZPI just finished its first year of operations. The following data relates to this first year:
Consider the following information for Presidio Inc.'s most recent year of operations. Number of units produced Number of units sold sales price per unit Direct materials per unit Direct labor per unit variable manufacturing overhead per unit Fixed manufacturing overhead per unit ($319,140 + 2,700 units) Total variable selling expenses ($11 per unit sold) Total fixed general and administrative expenses Req 2A Required: 2-a. Complete a full absorption costing income statement for Presidio. Assume there was no beginning inventory. 2-b. Complete a variable costing income statement for Presidio. Assume there was no beginning inventory. 3. Compute the difference in profit between full absorption costing and variable costing. Req 28 Complete this question by entering your answers in the tabs below. $ Gross Margin Less: Non-Manufacturing Expenses 2,700 1,650 660.00 80.00 110.00 60.00 118.20 Req 3 Net Operating Income 18,150.00 77,000.00 Complete a full absorption costing income statement for…
Garrett Company provided the following information: Common fixed cost totaled $46,000. Garrett allocates common fixed cost to Product 1and Product 2 on the basis of sales. If Product 2 is dropped, which of the following is true?a. Sales will increase by $300,000.b. Overall operating income will increase by $2,600.c. Overall operating income will decrease by $25,000.d. Overall operating income will not change.e. Common fixed cost will decrease by $27,600.
[The following information applies to the questions displayed below.] Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (11,600 units at $225 each) Variable costs (11,600 units at $180 each) Contribution margin Fixed costs Incone 1. Amount of sales 2. Margin of safety $ 2,610,000 2,088,000 522,000 315,000 $ 207,000 1. Assume Hudson has a target income of $150,000. What amount of sales (in dollars) is needed to produce this target income? 2. If Hudson achieves its target income, what is its margin of safety (in percent)? (Round your answer to 1 decimal place.)
A.Prepare Statement of Income and Expenses with a marginal contribution approach. Empresas La Torre presents the following information for the year ended December 31, 2020: Product Costs: Direct materials (Variables) $ 50.00 per unit Direct Labor (Variable) $ 20.00 per hour Variable Indirect Costs $ 10.00 per hour Total Fixed Indirect Costs $ 250,000 Period Expenses Seller Commissions $ 20.00 per unit Variable Administrative Expenses $ 30.00 per unit Total Fixed Administrative Expenses $ 150,000 The company sells solar batteries at $ 200.00 per unit. Making each battery takes 2 hours of direct labor. The company taxes its income at 40%. If the Company sells 10,000 units, prepare a statement of income and expenses using the marginal contribution approach.
Yancey, Inc reports the following information Units produced Units sold Sales poce Direct materials Direct labor 520 units 520 units $150 per unit $40 per unit $30 per unit Variable manufacturing overhead Fixed manufacturing overhead $20 per unit $24,000 per year $15 per unit Variable selling and administrative costs Fixed selling and administrative costs $25,000 per year What is the amount of unit product cost that will be considered for external reporting purposes? (Round any intermediate calculations and your final answer to the nearest cent) OA. $76 15 OB 5136 15 OC. $116 15 OD $80.00
Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales$ 55,000Variable expenses33,000Contribution margin22,000Fixed expenses14,960Net operating income$ 7,04015. Assume that the amounts of the company’s total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $14,960 and the total fixed expenses are $33,000. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in unit sales? (Round your intermediate calculations and final answer to 2 decimal places.)