Homework Answers
Ans. Option B $80,000 increase
Explanation and calculation: In absorption costing, unit product cost is equal to the sum of variable and fixed manufacturing cost per unit. On the other hand, variable costing unit product cost includes only variable manufacturing cost per unit.
Absorption costing net income is higher than variable costing net income if production units are increasing. The effect on net income will be calculated as follows:
Increase in net income = Increase in production * fixed overhead per unit
= 8,000 * $10
= $80,000
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1)
2)
3)
4)
5)
If variable costs per unit decreased because of a decrease in utility rates, the break-even point would Oa. decrease Ob. increase Oc. remain the same Od. increase or decrease, depending upon the percentage increase in utility rates If sales are $400,000, variable costs are 80% of sales, and operating income is $40,000, what is the operating leverage? Oa. 0.0 Ob. 1.3 Oc. 7.5 Od. 2.0 If fixed costs are $561,000 and the unit contribution margin...
Calculator A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (2,500 units): Direct materials Direct labor $42,500 85,000 47,500 12,500 Variable factory overhead Fixed factory overhead $187,500 Operating expenses: Variable operating expenses $15,000 Fixed operating expenses 4,500 19,500 If 75 units remain unsold at the end of the month, the amount of inventory that would be reported on the absorption costing balance sheet is Oa. $6,210 Ob. $5,760 Oc. $5,250 Od....
1)
2)
3)
4)
5)
When Isaiah Company has fixed costs of $103,530 and the contribution margin is $21, the break-even point is Oa. 5,700 units Ob. 12,420 units Oc.9,860 units Od. 4,930 units Variable costs as a percentage of sales for Lemon Inc. are 80%, current sales are $600,000, and fixed costs are $130,000. How much will operating income change if sales increase by $40,000? Oa. $8,000 decrease Ob. $30,000 decrease Oc. $30,000 increase Od. $8,000 increase Zipee Inc....
Osawa, Inc., planned and actually manufactured 190,000 units of its single product in 2017, its first year of operation. Variable manufacturing cost was $17 per unit produced. Variable operating (nonmanufacturing) cost was Sa per unit sold. Planned actual fixed manufacturing costs were 5570,000. Planned and actual fixed operating inonmanufacturing) costs totaled $400,000. Osawa sold 120,000 units of product at $43 per unit. Read the requirements. Requirement 2. Osawa's 2017 operating Income using variable costing is (a) $1,760,000, (b) $1,400.000, (c)...
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Please
help me!Thank you!
Seattle, Inc., planned and actually manufactured 240.000 units of its single product in 2017, its first year of operation Variable manufacturing cost was $21 per unit produced. Variable operating (nonmanufacturing) cost was $8 per unit sold. Planned and actual foxed manufacturing costs were $720,000. Planned and actual fixed operating (nonmanufacturing costs totaled $390,000. Seattle sold 160,000 units of product at $42 per unit Read the requirements! Review Only Click the icon to see the worked Solution....
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