Question
Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year. Units produced this year 40,000 units Units
Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year.
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|
|
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Units produced this year |
| 40,000 | units |
Units sold this year |
| 24,000 | units |
Direct materials | $ | 24 | per unit |
Direct labor | $ | 26 | per unit |
Variable overhead | $ | 120,000 | in total |
Fixed overhead | $ | 200,000 | in total |
1.
Given Advanced Company's data, compute cost of finished goods in inventory under variable costing.
Multiple Choice
- $928,000
- $2,320,000
- $1,392,000
- $848,000
- $1,272,000
2.Brush Industries reports the following information for May:
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Sales | $ | 930,000 |
|
Fixed cost of goods sold |
| 106,000 |
|
Variable cost of goods sold |
| 256,000 |
|
Fixed selling and administrative costs |
| 106,000 |
|
Variable selling and administrative costs |
| 131,000 |
|
|
Calculate the operating income for May under absorption costing.
Calculate the gross margin for May under absorption costing.
Multiple Choice
- $698,000
- $361,000
- $585,000
- $586,000
3.
Red and White Company reported the following monthly data:
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|
|
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Units produced |
| 2,700 | units |
Sales price | $ | 32 | per unit |
Direct materials | $ | 2 | per unit |
Direct labor | $ | 3 | per unit |
Variable overhead | $ | 4 | per unit |
Fixed overhead | $ | 8,640 | in total |
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Part 1.What is Red and White's net income under absorption costing if 1,050 units are sold and selling and administrative expenses are $17,000?
part 2. What is Red and White's net income under variable costing if 1,050 units are sold and operating expenses are $17,000?
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