Class_12_MGR - MANAGERIAL ACCOUNTING - IIE 211 CLASS 12...

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Unformatted text preview: MANAGERIAL ACCOUNTING - IIE 211 CLASS 12 LECTURE NOTES 1. CHAPTER 7 PROBLEM 11 2. QUIZ III (CHAPTERS 6 & 7) DUE CLASS 13_TUESDAY 1. REVIEW CHAPTER 8 ACTIVITY BASED COSTING 2. REVIEW CHAPTER 8 EXERCISE 3 Korea U Intranet http://iie.korea.ac.kr/intranet/ Garrison Text Site www.mhhe.com/ garrison11e eBook Text Site http://ebooks.primisonline.com 1 MANAGERIAL ACCOUNTING - IIE 211 CLASS 12 P roblem 7-11 1. The unit product cost under the variable costing method is computed as follows: Direct materials............................................ $ 4 Direct labor................................................... 7 Variable manufacturing overhead................. 1 Unit product cost.......................................... $12 With this figure, the variable costing income statements can be prepared: Year 1 Year 2 Sales.................................................................................... $1,000,000 $1,250,000 Less variable expenses: Variable cost of goods sold (@ $12 per unit)........................................................... 480,000 600,000 Variable selling and administrative expenses (@ $2 per unit).............................................................................. 80,000 100,000 Total variable expenses....................................................... 560,000 700,000 Contribution margin............................................................ 440,000 550,000 Less fixed expenses: Fixed manufacturing overhead........................................ 270,000 270,000 Fixed selling and administrative expenses...................... 130,000 130,000 Total fixed expenses............................................................ 400,000 400,000 Net operating income.......................................................... $ 40,000 $ 150,000 2. The reconciliation of absorption and variable costing follows: Year 1 Year 2 Variable costing net operating income.............................. $40,000 $150,000 Add: Fixed manufacturing overhead deferred in inventory under absorption costing (5,000 units $6 per unit).......................................................................... 30,000 Deduct: Fixed manufacturing overhead released from inventory under absorption costing (5,000 units $6 per unit).......................................................................... (30,000 ) Absorption costing net operating income.......................... $70,000 $120,000 QUIZ III (CHAPTER 6 & 7)- ENDS 1145 2 MANAGERIAL ACCOUNTING - IIE 211 CLASS 12 1.Which of the following is correct? The break-even point occurs on the CVP graph where: A) total profit equals total expenses. B) total profit equals total fixed expenses. C) total contribution margin equals total fixed expenses. D) total variable expenses equal total contribution margin. Answer: C Level: Medium LO: 1,2 2.The break-even point in unit sales is found by dividing total fixed expenses by:...
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Class_12_MGR - MANAGERIAL ACCOUNTING - IIE 211 CLASS 12...

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