1. The following information pertains to Yap Company\'s Grinding Department for

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1. The following information pertains to Yap Company's Grinding Department for the month of April: Units Materials Costs Beginning work in process 19,000 $11,500 Started in April 39,000 $26,000 Units completed and transferred out 47,500 Ending work in process 10,500 All materials are added at the beginning of the process. Using the weighted-average method, the cost per equivalent unit for materials is closest to: $0.67 $0.65 $0.79 $0.96 2. Borwan Company uses the weighted-average method in its process costing system. The Assembly Department started the month with 6,100 units in its beginning work in process inventory that were 70% complete with respect to conversion costs. An additional 71,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 3,100 units in the ending work in process inventory of the Assembly Department that were 25% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month? 74,775 74,000 77,100 76,325 3. Sanchez Corporation uses the weighted-average method in its process costing system. The Fitting Department is the second department in its production process. The data below summarize the department's operations in March. Units Percent Complete with Respect to Conversion Beginning work in process inventory 8,000 75% Transferred in from the prior department during March 53,000 Ending work in process inventory 4,600 80% The Fitting Department's cost per equivalent unit for conversion cost for March was $9.46. How much conversion cost was assigned to the units transferred out of the Fitting Department during March? $577,060 $533,544 $568,357 $501,380 4. In February, one of the processing departments at Whisenhunt Corporation had beginning work in process inventory of $36,000 and ending work in process inventory of $21,000. During the month, the cost of units transferred out from the department was $511,000. In the department's cost reconciliation report for February, the total cost to be accounted for would be: $568,000 $532,000 $547,000 $57,000 6. Chae Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 1,050 units. The costs and percentage completion of these units in beginning inventory were: Cost Percent Complete Materials costs $15,000 75% Conversion costs $7,700 25% A total of 10,200 units were started and 9,800 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Materials costs $148,304 Conversion costs $437,878 The ending inventory was 80% complete with respect to materials and 70% complete with respect to conversion costs. The total cost transferred from the first processing department to the next processing department during the month is closest to: (Round your cost per equivalent unit answers to 2 decimal places.) $549,780 $612,021 $584,607 $597,407 7. Nando Company uses the weighted-average method in its process costing system. Department J is the second of three sequential processes at the company. During October, Department J collected the following data: Labor and Overhead Units Percentage Complete Work in process, October 1 9,100 60% Units started 30,000 Completed and transferred 25,000 Work in process, October 31 14,100 20% Costs for October Transferred In Materials Labor and Overhead Work in process, October 1 $40,000 $17,000 $ 31,500 Added during the month $77,300 $108,120 $191,060 All materials are added at the beginning of the process. The total cost assigned to ending work in process inventory was: (Round your intermediate calculations to 2 decimal places.) $70,120 $109,980 $161,380 $87,420 8. Nando Company uses the weighted-average method in its process costing system. Department J is the second of three sequential processes at the company. During October, Department J collected the following data: Labor and Overhead Units Percentage Complete Work in process, October 1 9,100 60% Units started 30,000 Completed and transferred 25,000 Work in process, October 31 14,100 20% Costs for October Transferred In Materials Labor and Overhead Work in process, October 1 $40,000 $17,000 $ 31,500 Added during the month $77,300 $108,120 $191,060 All materials are added at the beginning of the process. The total cost assigned to ending work in process inventory was: (Round your intermediate calculations to 2 decimal places.) $70,120 $109,980 $161,380 $87,420 9. Cindy, Inc. sells a product for $8 per unit. The variable expenses are $4 per unit, and the fixed expenses total $40,000 per period. By how much will net operating income change if sales are expected to increase by $42,000? $21,000 increase $19,000 decrease $2,000 increase $24,000 increase 10. Pool Company's variable expenses are 40% of sales. Pool is contemplating an advertising campaign that will cost $20,400. If sales increase by $80,400, the company's net operating income should increase by: (Do not round intermediate calculations.) $60,480 $27,840 $8,160 $32,160 11. Kendall Company has sales of 1,250 units at $60 a unit. Variable expenses are 40% of the selling price. If total fixed expenses are $35,000, the degree of operating leverage is: rev: 03_06_2012 3.17 7.50 4.50 3.00 12. At a sales level of $98,000, Blue Company's contribution margin is $16,000. If the degree of operating leverage is 5 at a $98,000 sales level, net operating income must equal: $19,600 $3,200 $12,800 $16,400 13. Mark Corporation produces two models of calculators. The Business model sells for $60, and the Math model sells for $30. The variable expenses are given below: Business Model Math Model Variable production costs per unit $20 $21 Variable selling and administrative expenses per unit $ 10 $ 7 The fixed expenses are $85,000 per month. The expected monthly sales of each model are: Business, 2,000 units; Math, 1,500 units. The contribution margin ratio for the Business model is: (Do not round intermediate calculations.) 30% 50% ?? 70% 80% 14. Mark Corporation produces two models of calculators. The Business model sells for $39, and the Math model sells for $32. The variable expenses are given below: Business Model Math Model Variable production costs per unit $18 $12 Variable selling and administrative expenses per unit $12 $ 7 The fixed expenses are $75,900 per month. The expected monthly sales of each model are: Business, 1,600 units; Math, 550 units. The break-even point in unit sales for the expected sales mix is closest to: (Do not round intermediate calculations.) 1,937 of each product 5,635 of each product 1,937 Business Model and 5,635 Math Model 5,635 Business Model and 1,937 Math Model 15. Product L40O Product Y27L Sales $23,200 $50,200 Variable expenses 9,280 18,890 Contribution margin $13,920 $31,310 If the sales mix were to shift toward Product L40O with total dollar sales remaining constant, the overall break-even point for the entire company: could increase or decrease. would increase. would not change. would decrease. 16. Sproles Inc. manufactures a variety of products. Variable costing net operating income was $90,500 last year and its inventory decreased by 3,500 units. Fixed manufacturing overhead cost was $6 per unit. What was the absorption costing net operating income last year? $90,500 $21,000 $69,500 $111,500 17. Carr Company produces a single product. During the past year, Carr manufactured 30,420 units and sold 24,900 units. Production costs for the year were as follows: Fixed manufacturing overhead $395,460 Variable manufacturing overhead $258,570 Direct labor $142,974 Direct materials $234,234 Sales totaled $1,207,650, variable selling expenses totaled $136,950, and fixed selling and administrative expenses totaled $185,562. There were no units in beginning inventory. Assume that direct labor is a variable cost. The contribution margin per unit would be: (Do not round intermediate calculations.) $27.60 $22.10 $17.60 $23.20 18. Kilihea Corporation produces a single product. The company's absorption costing income statement for July follows: Kilihea Corporation Income Statement For the month ended July 31 Sales (18,100 units) $814,500 Cost of goods sold 552,050 Gross margin 262,450 Selling and administrative expenses: Fixed 126,700 Variable 90,500 Total selling and administrative expense 217,200 Net operating income $ 45,250 The company's variable production costs are $22.50 per unit and its fixed manufacturing overhead totals $153,300 per month. The break-even point in units for the month under variable costing is (Round your intermediate calculations and final answer to nearest whole number): 13,150 units 12,350 units 16,000 units 14,250 units 19. Eagle Corporation manufactures a picnic table. Shown below is Eagle's cost structure: Variable cost per table Total fixed cost for the year Manufacturing cost $88 $255,300 Selling and administrative $6 $36,630 In its first year of operations, Eagle produced and sold 11,100 tables. The tables sold for $132 each. How would Eagle's variable costing net operating income be affected in its first year if only 9,680 tables were sold instead of 11,100? net operating income would have been $78,810 lower net operating income would have been $53,960 lower net operating income would have been $29,820 lower net operating income would have been $59,960 lower 20. Pong Incorporated's income statement for the most recent month is given below. Total Store G Store H Sales $160,000 $66,900 $93,100 Variable expenses 54,835 28,767 26,068 ________________________________________ ________________________________________ ________________________________________ Contribution margin 105,165 38,133 67,032 Traceable fixed expenses 71,700 19,800 51,900 ________________________________________ ________________________________________ ________________________________________ Segment margin 33,465 $18,333 $15,132 Common fixed expenses 20,600 ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________ Net operating income $ 12,865 ________________________________________________________________________________ The marketing department believes that a promotional campaign for Store H costing $10,800 will increase the store's sales by $17,800. If the campaign is adopted, overall company net operating income should: decrease by $4,984 decrease by $5,482 increase by $2,016 increase by $7,000 21. Olds Inc., which produces a single product, has provided the following data for its most recent month of operations: Number of units produced 8,300 Variable costs per unit: Direct materials $120 Direct labor $116 Variable manufacturing overhead $4 Variable selling and administrative expenses $10 Fixed costs: Fixed manufacturing overhead $273,900 Fixed selling and administrative expenses $589,300 There were no beginning or ending inventories. The absorption costing unit product cost was: $236 $273 ?? $240 $354 22. A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: Selling price $135 Units in beginning inventory 0 Units produced 5,000 Units sold 4,900 Units in ending inventory 100 Variable cost per unit: Direct materials $33 Direct labor $34 Variable manufacturing overhead $4 Variable selling and administrative $6 Fixed costs: Fixed manufacturing overhead $185,000 Fixed selling and administrative expenses $88,200 185,000 / 5,000 = $37 185,000 + 4,900 + 88,200 = 278100 4900 x 6= 29,400 185,000 + 29,400+ 88,200 = 302,600 What is the total period cost for the month under variable costing? $185,000 $117,600 $273,200 $302,600 23. A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: Selling price $137 Units in beginning inventory 0 Units produced 2,850 Units sold 2,700 Units in ending inventory 150 Variable cost per unit: Direct materials $44 Direct labor $21 Variable manufacturing overhead $12 Variable selling and administrative $17 Fixed costs: Fixed manufacturing overhead $91,200 Fixed selling and administrative expenses $10,800 Unit fixed manufacturing overhead = $91,200 Units produced $2,850 = $32 $91,200 / 2,850 = $32 Unit product cost = Direct materials +direct labor +Variable manufacturing overhead cost + Fixed manufacturing overhead cost = $44 + $21+ $12 +32 = 109 137-94=$43 $43 x 2,700 units sold = 116,100 Total contribution margin for the month under the variable costing approach Units produced 2,850 77 + 32 = $109 Fixed manufacturing overhead $91,200 / 2,850 =$32 Selling Price 137 - 109 =28 28 x 2700 = 75,600 The total gross margin for the month under absorption costing is: $75,600 total gross margin for the month under absorption costing $18,900 $105,300 $116,100 Total contribution margin for the month under the variable costing approach 24. Carr Company produces a single product. During the past year, Carr manufactured 29,010 units and sold 23,900 units. Production costs for the year were as follows: Fixed manufacturing overhead $319,110 Variable manufacturing overhead $243,684 Direct labor $121,842 Direct materials $214,674 Sales totaled $1,159,150, variable selling expenses totaled $126,670, and fixed selling and administrative expenses totaled $205,971. There were no units in beginning inventory. Assume that direct labor is a variable cost. Under variable costing, the net income for the year would be: $30,149 lower than under absorption costing $30,149 higher than under absorption costing $56,210 lower than under absorption costing $56,210 higher than under absorption costing 25. DeAnne Company produces a single product. The company's variable costing income statement for August appears below: DeAnne Company Income Staement For the month ended August 31 Sales ($22 per unit) $ 952,600 ________________________________________ Variable expenses: Variable cost of goods sold 606,200 Variable selling expense 129,900 ________________________________________ Total variable expenses 736,100 ________________________________________ Contribution margin 216,500 ________________________________________ Fixed expenses: Fixed manufacturing 107,130 Fixed selling and administrative 35,710 ________________________________________ Total fixed expenses 142,840 ________________________________________ Net operating income $ 73,660 ________________________________________________________________________________ The company produced 35,710 units in August and the beginning inventory consisted of 8,490 units. Variable production costs per unit and total fixed costs have remained constant over the past several months. Under absorption costing, the ending inventory for the month ended August 31 would be reported at: $12,600 $18,000 $15,300 $23,000

Explanation / Answer

$15,300

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