Chapter 06 Variable Costing and Segment Reporting: Tools for Management

50. A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:



The total gross margin for the month under absorption costing is:
A. $42,000
B. $14,700
C. $69,000
D. $79,800

51. A company produces a single product. Last year, fixed manufacturing overhead was $30,000, variable production costs were $48,000, fixed selling and administration costs were $20,000, and variable selling administrative expenses were $9,600. There was no beginning inventory. During the year, 3,000 units were produced and 2,400 units were sold at a price of $40 per unit. Under variable costing, net operating income would be:
A. a profit of $6,000.
B. a profit of $4,000.
C. a loss of $2,000.
D. a loss of $4,400.

52. A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:



The total contribution margin for the month under variable costing is:
A. $183,600
B. $90,000
C. $70,400
D. $169,200

53. Last year, Heidenescher Corporation's variable costing net operating income was $63,600 and its inventory decreased by 600 units. Fixed manufacturing overhead cost was $1 per unit. What was the absorption costing net operating income last year?
A. $64,200
B. $63,000
C. $63,600
D. $600

54. 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?
A. $90,500
B. $21,000
C. $69,500
D. $111,500

55. Roberts Company produces a single product. This year, the company's net operating income under absorption costing was $2,000 lower than under variable costing. The company sold 8,000 units during the year, and its variable costs were $8 per unit, of which $2 was variable selling and administrative expense. If production cost was $10 per unit under absorption costing, then how many units did the company produce during the year? (The company produced the same number of units last year.)
A. 7,500 units
B. 7,000 units
C. 9,000 units
D. 8,500 units

56. Evans Company produces a single product. During the most recent year, the company had a net operating income of $90,000 using absorption costing and $84,000 using variable costing. The fixed overhead application rate was $6 per unit. There were no beginning inventories. If 22,000 units were produced last year, then sales for last year were:
A. 15,000 units
B. 21,000 units
C. 23,000 units
D. 28,000 units

57. Craft Company produces a single product. Last year, the company had a net operating income of $80,000 using absorption costing and $74,500 using variable costing. The fixed manufacturing overhead cost was $5 per unit. There were no beginning inventories. If 21,500 units were produced last year, then sales last year were:
A. 16,000 units
B. 20,400 units
C. 22,600 units
D. 27,000 units

58. Moore Company produces a single product. During last year, Moore's variable production costs totaled $10,000 and its fixed manufacturing overhead costs totaled $6,800. The company produced 5,000 units during the year and sold 4,600 units. There were no units in the beginning inventory. Which of the following statements is true?
A. The net operating income under absorption costing for the year will be $800 higher than net operating income under variable costing.
B. The net operating income under absorption costing for the year will be $544 higher than net operating income under variable costing.
C. The net operating income under absorption costing for the year will be $544 lower than net operating income under variable costing.
D. The net operating income under absorption costing for the year will be $800 lower than net operating income under variable costing.

59. Last year, Salada Corporation's variable costing net operating income was $97,000. Fixed manufacturing overhead costs released from inventory under absorption costing amounted to $14,000. What was the absorption costing net operating income last year?
A. $14,000
B. $111,000
C. $97,000
D. $83,000