Section C Variable and Absorption Costing The following information is for the next two Questions: Osawa planned to produce and actually manufactured 200,000 units of its single product in its first year of operations. Variable manufacturing costs were $30 per unit of product. Planned and actual fixed manufacturing costs were $600,000, and the selling and administrative costs totaled $400,000. Osawa sold 120,000 units of product at a selling price of $40 per unit. Question 101: Osawas operating income using absorption costing is: a) $200,000 b) $440,000 c) $600,000 d) $840,000 Question 102: Osawas operating income using variable costing is: a) $200,000 b) $440,000 c) $800,000 d) $600,000 (CMA Adapted) The following information is for the next two Questions: Product sales: Variable manufacturing costs: Fixed manufacturing overhead: Variable selling and administrative costs: Fixed selling and administrative costs: Units produced: 1,200 Beginning inventory o units Question 103: Operating income under variable (direct) costing is: a) $600 b) $700 c) $1,800 d) $2,300 1,000 units at $10 each $5.50 per unit $.50 per unit sold $1,200 $1,000 Question 104: Assuming operating income under variable costing is $ 1,800, operating Income under absorption costing is: a) $1,800 b) $1,967 c) $2,000 d) $2,167 (CIA Adapted)
Posted on: Mon, 21 Jul 2014 13:47:46 +0000