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13. The following information was extracted from the first year of absorption-based accounting records ofSoulmate Co.Total fixed costs incurredP100,000Total variable costs incurred50,000Total period costs incurred70,000Total variable period costs incurred30,000Units produced20,000Units sold12,000Unit sales PriceP12Based on variable costing, if Soulmate Co. had sold 12,001 units instead of 12,000, its income before taxeswould have beenA.P9.50 higherC.P11.00 higherB.P8.50 higherD.P8.33 higher
14.At its present level of operations, a small manufacturing firm has total variable costs equal to 75% of sales andtotal fixed costs equal to 15% of sales.Based on variable costing, if sales change by P1.00, income will changeby
Full/Absorption costing15. Absorption costing of inventories, as required by GAAP, has been criticized for encouraging managers toincrease year-end inventories in order to boost reported profits. Which of the following techniques is the mosteffective at resolving this problem?
16.When absorption costing is used, all of the following costs are considered product costs except
17.Unabsorbed fixed overhead costs in an absorption costing system areA.Fixed factory costs not allocated to units produced.B.Variable overhead costs not allocated to units produced.C.Excess variable overhead costs.D.Costs that should be controlled.
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Gross margin18.A company manufactures a single product for its customers by contracting in advance of production.Therefore,the company only produces units that will be sold by the end of each period.During the last period, the followingsales were made and costs incurred:SalesP40,000Direct materials9,050Direct labor6,000Rent (9/10 factory, 1/10 office)3,000Depreciation on factory equipment2,000Supervision (2/3 factory,1/3office)1,500Salespeople’s salaries1,300Insurance (2/3 factory, 1/3 office)1,200Office supplies750Advertising700Depreciation on office equipment500Interest on loan300Based on the above data, the gross margin percentage for the last period (rounded to nearest percent) was

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Term
Summer
Professor
atty. aguinalde
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