Ch 6 Review Questions

Ch 6 Review Questions - $3,000 $40,000 $41,000 Sales-VC DM...

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Ch 6 Review Questions Wednesday, March 16, 2011 9:39 AM A. 149 in Course Pack #17-22 -Product sells for $11,000/unit -variable costs per unit: Manufacturing: $6000 Selling/Admin: $125 -fixed costs: OHD: $30,000 Selling/admin: $40,000 -No beg. Inventory at 1/1/05 -production was 20 units/year in 2005-2007 -sales were 20 units in 2005, 16 in 2006, 24 in 2007 #17. Income under absorption costing for 2006 is: a.$8,000 b. $14,000 c. $16,000 d. $22,000 e. $33,000 ABS 2005 2006 2007 Direct 2005 2006 Sales -CGS ...DM ...DL ...VOHD …FOHD GP -S+A Exp ...V SG+A ...F SG+A Profit $220,000 $150,000 $70,000 $2,500 $40,000 $27,500 $176,000 $120,000 $56,000 $2,000 $40,000 $14,000 $264,000 $180,000 $84,000
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Unformatted text preview: $3,000 $40,000 $41,000 Sales-VC DM DL ...VOHD V SG+A CM-FC ...FOHD ...F SG+A Profit $220,000 $120,000 $2,500 $97,500 $30,000 $40,000 $27,500 $176,000 $96,000 $2,000 78,000 30,000 40,000 8,000 (DM+DL+VOHD)= $6,000 $30,000/20 = $1,500 FOHD per unit 2007 264,000 144,000 3000 117000 30,000 40,000 47,000 Difference in profit = change in inventory x FOHD/unit = 4 x $1500 = $6000 1. For all three years absorption costing = variable costing income! 82,500 = 82,500 1. Management may be tempted to overproduce when using absorption costing, in order to increase net income 17. B 1. B 1. A 1. A...
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This note was uploaded on 02/27/2012 for the course BUSI 101 taught by Professor Skender during the Spring '08 term at UNC.

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Ch 6 Review Questions - $3,000 $40,000 $41,000 Sales-VC DM...

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