Using the full absorption costing method chassens

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only finished goods inventory at month-end. Using the full absorption costing method, Chassen's finished goods inventory value would be a. $50,000. b. $70,000. c. $85,000. d. $145,000.
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76 196. CSO: 1D1d LOS: 1D1g Consider the following situation for Weisman Corporation for the prior year. The company produced 1,000 units and sold 900 units, both as budgeted. There were no beginning or ending work-in-process inventories and no beginning finished goods inventory. Budgeted and actual fixed costs were equal, all variable manufacturing costs are affected by volume of production only, and all variable selling costs are affected by sales volume only. Budgeted per unit revenues and costs were as follows. Per Unit Sales price $100 Direct materials 30 Direct labor 20 Variable manufacturing costs 10 Fixed manufacturing costs 5 Variable selling costs 12 Fixed selling costs ($3,600 total) 4 Fixed administrative costs ($1,800 total) 2 The operating income for Weisman for the prior year using absorption costing was a. $13,600. b. $14,200. c. $15,300. d. $15,840. 197. CSO: 1D1d LOS: 1D1f When comparing absorption costing with variable costing, the difference in operating income can be explained by the difference between the a. units sold and the units produced, multiplied by the unit sales price. b. ending inventory in units and the beginning inventory in units, multiplied by the budgeted fixed manufacturing cost per unit. c. ending inventory in units and the beginning inventory in units, multiplied by the unit sales price. d. units sold and the units produced, multiplied by the budgeted variable manufacturing cost per unit.
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77 198. CSO: 1D1d LOS: 1D1g Mill Corporation had the following unit costs for the recently concluded calendar year. Variable Fixed Manufacturing $8.00 $3.00 Nonmanufacturing $2.00 $5.50 Inventory for Mill’s sole product totaled 6,000 units on January 1 and 5,200 units on December 31. When compared to variable costing income, Mill’s absorption costing income is a. $2,400 lower. b. $2,400 higher. c. $6,800 lower. d. $6,800 higher. 199. CSO: 1D1d LOS: 1D1f Which of the following correctly shows the treatment of (1) factory insurance, (2) direct labor, and (3) finished goods shipping costs under absorption costing and variable costing? Absorption Costing Variable Costing Product Cost Period Cost Product Cost Period Cost a. 1, 2 3 2 1, 3. b. 2 1, 3 1, 2 3. c. 1, 2 3 1 2, 3. d. 1 2, 3 2, 3 1.
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78 200. CSO: 1D1d LOS: 1D1g Troughton Company manufactures radio-controlled toy dogs. Summary budget financial data for Troughton for the current year are as follows. Sales (5,000 units at $150 each) $750,000 Variable manufacturing cost 400,000 Fixed manufacturing cost 100,000 Variable selling and administrative cost 80,000 Fixed selling and administrative cost 150,000 Troughton uses an absorption costing system with overhead applied based on the number of units produced, with a denominator level of activity of 5,000 units. Underapplied or overapplied manufacturing overhead is written off to cost of goods sold in the year incurred. The $20,000 budgeted operating income from producing and selling 5,000 toy dogs planned for this year is of concern to Trudy George, Troughton’s president. She believes she could increase operating income
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