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ACCT 206 Ch 7 Practice Exam

ACCT 206 Ch 7 Practice Exam - Garrison 13e Practice Exam...

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Garrison 13e Practice Exam – Chapter 7 Print these pages. Answer each of the following questions, explaining your answers or showing your work, as appropriate, and then compare your solutions to those provided at the end of the practice exam. 1. Describe the major advantages of the variable costing method. 2. Describe the major advantages of the absorption costing method. 3. Vosges Candy Company produces handmade candies. The candies sell for $12 per box. During its first year of operations, the company produced 10,000 boxes of candies and sold 9,000 boxes of the candies. The company’s cost information includes the following: Direct materials $ 2.00 per unit Direct labor $ 3.00 per unit Variable manufacturing overhead $ 1.00 pr unit Variable selling and administrative expenses $ 3.00 per unit Fixed manufacturing overhead $20,000 Fixed selling and administrative expenses $ 5,000 Part (a) Compute the unit product cost under absorption costing.
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Part (b) Compute the unit product cost under variable costing.
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