Reference no: EM132790173
Questions -
Q1. Atlantic Company produces a single product. For the most recent year, the company's net operating income computed by the absorption costing method was P7,400, and its net operating income computed by the variable costing method was P10,100. The company's unit product cost was P17 under variable costing and P22 under absorption costing. If the ending inventory consisted of 1,460 units, the beginning inventory must have been:
a.920 units b.1,460 units c.2,000 units d.12,700 units
Q2. Ben Company produces a single product. Last year, the company's net operating income under absorption costing was P4,400 lower than variable costing. The company sold 8,000 units during the year, and its variable costs were P8 per unit, of which P3 was variable selling expense. Fixed manufacturing overhead was P1 per unit in the beginning inventory under absorption costing. How many units did the company produce during the year?
a.12,400 units b.3,600 units c.7,120 units d.7,450 units
Q3. Schrick Inc. manufactures a variety of products. Variable costing net operating income was P86,800 last year and ending inventory increased by 1,900 units. Fixed manufacturing overhead cost was P6 per unit. What was the absorption costing net operating income last year?
a.P86,800 b.P75,400 c.P98,200 d.P11,400
Q4. Tweet Inc. planned and actually manufactured 200,000 units of its single product, its first year of operations. Variable manufacturing costs were P30 per unit of product. Planned and actual fixed manufacturing costs were P600,000 and selling and administrative costs totaled P400,000. Tweet sold 120,000 units of product at selling price of P40 per unit.
Tweet's operating income using absorption (full) costing is
a. P200,000 b. P440,000 c. P600,000 d. P840,000
Q5. Using the information in No. 4, Tweet's operating income for the year using variable costing is
a. P200,000 b. P440,000 c. P800,000 d. P600,000
Q6. The following is taken from Chatt Company's records for the current fiscal year ended November 30:
Direct material used P300,000
Direct labor 100,000
Variable factory overhead 50,000
Fixed factory overhead 80,000
Selling and admin. Costs - variable 40,000
Selling and admin. Costs - fixed 20,000
If Chatt Company uses variable costing, the inventoriable costs for the fiscal year are
a. P400,000 b. P450,000 c. P490,000 d. P530,000
Q7. Using the information in No. 6, the inventoriable costs using absorption (full) costing are
a. P400,000 b. P450,000 c. P530,000 d. P590,000