1. Given the following cost data, what type of cost is shown?
| Cost per unit | # of units |
| $5,000 | 1 |
| $2,500 | 2 |
| $1,667 | 3 |
| $1,250 | 4 |
Answer
| mixed cost | ||
| variable cost | ||
| fixed cost | ||
| none of the above |
2. A business operated at 100% of capacity during its first month, with the following results:
| Sales (160 units) | $160,000 | |
| Production costs (200 units): | ||
| Direct materials | $100,000 | |
| Direct labor | 20,000 | |
| Variable factory overhead | 10,000 | |
| Fixed factory overhead | 4,000 | 134,000 |
| Operating expenses: | ||
| Variable operating expenses | $ 12,000 | |
| Fixed operating expenses | 2,000 | 14,000 |
What is the amount of the manufacturing margin that would be reported on the variable costing income statement?
Answer
| $30,000 | ||
| $38,000 | ||
| $56,000 | ||
| $44,000 |
3.A business operated at 100% of capacity during its first month and incurred the following costs:
| Production costs (5,000 units): | ||
| Direct materials | $70,000 | |
| Direct labor | 20,000 | |
| Variable factory overhead | 10,000 | |
| Fixed factory overhead | 2,000 | $102,000 |
| Operating expenses: | ||
| Variable operating expenses | $17,000 | |
| Fixed operating expenses | 1,000 | 18,000 |
If 1,000 units remain unsold at the end of the month and sales total $150,000 for the month, what would be the amount of income from operations reported on the absorption costing income statement?
Answer
| $50,400 | ||
| $70,000 | ||
| $52,000 | ||
| $68,400 |