What is the net operating income for the month under variable costing - 94857

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Use the following to answer questions 1-8: Gunes Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were: The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs. Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places. 1. How many units are in ending work in process inventory in the first processing department at the end of the month? A) 1,900 B) 1,100 C) 7,700 D) 900 2. What are the equivalent units for materials for the month in the first processing department? A) 7,400 B) 9,300 C) 8,350 D) 950 3. What are the equivalent units for conversion costs for the month in the first processing department? A) 9,300 B) 8,065 C) 7,400 D) 665 4. The cost per equivalent unit for materials for the month in the first processing department is closest to: A) $18.29 B) $17.02 C) $16.42 D) $15.28 5. The cost per equivalent unit for conversion costs for the first department for the month is closest to: A) $40.03 B) $46.16 C) $44.58 D) $48.47 6. The cost per equivalent whole unit for the month in the first processing department is closest to: A) $64.45 B) $56.45 C) $68.32 D) $70.95 7. The total cost transferred from the first processing department to the next processing department during the month is closest to: A) $476,923 B) $599,376 C) $501,600 D) $525,000 8. The cost of ending work in process inventory in the first processing department according to the company's cost system is closest to: A) $61,227 B) $48,071 C) $42,859 D) $122,453 Use the following to answer questions 9-11: Callis Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $141.60 per unit. 9. The best estimate of the total monthly fixed cost is: A) $692,200 B) $725,400 C) $659,000 D) $327,000 10. The best estimate of the total variable cost per unit is: A) $131.80 B) $53.10 C) $66.40 D) $120.90 11. The best estimate of the total contribution margin when 5,300 units are sold is: A) $51,940 B) $469,050 C) $109,710 D) $398,560 Use the following to answer questions 12-13: The management of Casablanca Manufacturing Corporation believes that machine-hours is an appropriate measure of activity for overhead cost Shown below are machine-hours and total overhead costs for the past six months: Assume that the relevant range includes all of the activity levels mentioned in this problem. 12. If Casablanca expects to incur 185,000 machine hours next month, what will the estimated total overhead cost be using the high-low method? A) $212,750 B) $359,750 C) $382,750 D) $381,700 13. What is Casablanca's independent variable? A) the year B) the machine hours C) the total overhead cost D) the relevant range Use the following to answer questions 14-16: The University Store, Inc. is the major bookseller for four nearby colleges An income statement for the first quarter of the year is presented below: On average, a book sells for $40.00. Variable selling expenses are $3.00 per book; the remaining selling expenses are fixed. The variable administrative expenses are 5% of sales; the remainder of the administrative expenses are fixed. 14. The contribution margin for the University Store for the first quarter is: A) $660,000 B) $700,000 C) $180,000 D) $140,000 15. The net operating income computed using the contribution approach for the first quarter is: A) $ 30,000 B) $180,000 C) $140,000 D) $0 16. If 25,000 books are sold during the second quarter and this activity is within the relevant range, the company's expected contribution margin would be: A) $875,000 B) $300,000 C) $175,000 D) $ 65,000 Use the following to answer questions 17-19: A cement manufacturer has supplied the following data: 17. What is the company's unit contribution margin? A) $4.20 B) $0.45 C) $1.90 D) $2.10 18. The company's contribution margin ratio is closest to: A) 40.0% B) 50.0% C) 60.0% D) 10.7% 19. If the company increases its unit sales volume by 5% without increasing its fixed expenses, then total net operating income should be closest to: A) $5,000 B) $123,100 C) $105,000 D) $102,500 Use the following to answer questions 20-21: The following data were supplied by Reader Corporation: 20. The contribution margin is: A) $420,000 B) $54,000 C) $474,000 D) $180,000 21. The break-even point in sales dollars is: A) $470,000 B) $180,000 C) $420,000 D) $561,000 Use the following to answer questions 22-23: A manufacturer of premium wire strippers has supplied the following data: 22. The company's margin of safety in units is closest to: A) 384,762 B) 263,704 C) 61,017 D) 522,740 23. The company's degree of operating leverage is closest to: A) 9.18 B) 3.11 C) 2.07 D) 26.13 24. Chibu Corporation is a single product firm with the following cost formula for all of its costs for next year: Y = $225,000 + $30X Chibu sells its product for $120 per unit. What would Chibu's total sales dollars have to be next year in order to generate $270,000 of net operating income? A) $618,750 B) $660,000 C) $1,080,000 D) $1,980,000 Use the following to answer questions 25-32: Abbey Company, which has only one product, has provided the following data concerning its most recent month of operations: 25. What is the unit product cost for the month under variable costing? A) $87 B) $101 C) $112 D) $98 26. What is the unit product cost for the month under absorption costing? A) $101 B) $98 C) $87 D) $112 27. The total contribution margin for the month under the variable costing approach is: A) $170,800 B) $256,200 C) $100,900 D) $189,100 28. The total gross margin for the month under the absorption costing approach is: A) $189,100 B) $6,100 C) $170,800 D) $191,000 29. What is the total period cost for the month under the variable costing approach? A) $252,900 B) $164,700 C) $88,200 D) $185,800 30. What is the total period cost for the month under the absorption costing approach? A) $88,200 B) $252,900 C) $97,600 D) $164,700 31. What is the net operating income for the month under variable costing? A) $3,300 B) $2,800 C) ($14,100) D) $6,100 32. What is the net operating income for the month under absorption costing? A) $3,300 B) $2,800 C) ($14,100) D) $6,100
Solution Description

1.

A

2.

C

3.

B

4.

A

5.

B

6.

A