1. The Collins Corporation just started business in January of 2012. They had no

Question

1. The Collins Corporation just started business in January of 2012. They had no beginning inventories. During 2012 they manufactured 11,646 units of product, and sold 8,373 units. The selling price of each unit was $28. Variable manufacturing costs were $6 per unit, and variable selling and administrative costs were $3 per unit. Fixed manufacturing costs were $24,450 and fixed selling and administrative costs were $8,602.

What would be the Collins Corporations Net income for 2012 using absorption costing?

Select the correct answer.

A. $198,710

B. $132,906

C. $201,392

D.

$234,444

2. A business operated at 100% of capacity during its first month and incurred the following costs:

Production costs (18,878 units):

Direct materials

$179,063

Direct labor

229,619

Variable factory overhead

262,647

Fixed factory overhead

104,481

$775,810

Operating expenses:

Variable operating expenses

$124,580

Fixed operating expenses

43,297

167,877

If 1,745 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the absorption costing balance sheet?

Select the correct answer.

A. $71,712

B. $73,570

C. $87,230

D. $62,055

A. $198,710

B. $132,906

C. $201,392

D.

$234,444

Explanation / Answer

1 Collins Corporation Units poduced          11,646 Units sold            8,373 closing stock            3,273 Income Statement 2012 Details Per unit Total Amt $ Sales Revenue            28.00           234,444 Variable Manufacturing Cost               6.00              69,876 Fixed manufacturing cost               2.10              24,450 Less Closing Stcks @$8.10/unit               8.10           (26,509) Cost of goods sold              67,817 Gross profit           166,627 variable selling & Admin               3.00              25,119 Fixed selling & admin                8,602 Net Income2012           132,906 So Option B is correct 2 Units produced    18,878.00 closing stock      1,745.00 cost of production Details Per unit Total Amt $ Direct Material            9.485           179,063 Direct Labor          12.163           229,619 Variable Factory OH          13.913           262,647 Fixed Factory OH            5.535           104,481 Total          41.096           775,810 Cost of Closing stock of 1745 units @$41.10/unit $         71,712 So option A. is correct

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.