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

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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
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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
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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:  3.Minist Company sells a single product at a selling price of $15.00 per unit. Last year,  the company's sales revenue was $225,000 and its net operating income was  $18,000. If fixed expenses totaled $72,000 for the year, the break-even point in  unit sales was 
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