Data that are required for CVP analysis can be take  directly from the contribution margin format income statement. All things being equal, profit for the period is not  affected by changing inventories. Profits tend to move in the same direction as sales. All of the above.     QUESTION 6 Using absorption costing, a unit of product includes
Background image of page 22
Info iconThis preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentRight Arrow Icon
what costs? Direct materials, direct labor, and fixed overhead. Direct materials, direct labor, and variable overhead. Direct materials, direct labor, variable overhead,  and fixed overhead. Only direct materials and direct labor.     QUESTION 7 Using the following data, determine the unit product  cost under variable costing. Units produced 1,000 Direct materials $6 Direct labor $10 Fixed overhead $6,000 Variable overhead
Background image of page 23
$6 Fixed selling and administrative $2,000 Variable selling and administrative $2 $22 $24 $28 <— INCORRECT $30     QUESTION 8 Under the variable costing method, which of the  following is always expensed in its entirety in the  period in which it is incurred? fixed manufacturing overhead cost fixed selling and administrative expense
Background image of page 24
Info iconThis preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentRight Arrow Icon
variable selling and administrative expense all of the above     QUESTION 9 A reason why absorption costing income statements  are sometimes difficult for the manager to interpret  is that: they omit variable expenses entirely in computing  net operating income. they shift portions of fixed manufacturing  overhead from period to period according to  changing levels of inventories. they include all fixed manufacturing overhead on the income statement each year as a period cost. they ignore inventory levels in computing income  charges.     QUESTION 10
Background image of page 25
A manufacturing company that produces a single  product has provided the following data concerning  its most recent month of operations: What is the total period cost for the month under the  absorption costing approach? $56,700 $65,500 $8,800 $37,800     QUESTION 11 Mullee Corporation produces a single product and  has the following cost structure:
Background image of page 26
Info iconThis preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentRight Arrow Icon
The unit product cost under absorption costing is: $149 $65 $63 $128     QUESTION 12 Hurlex Company produces a single product. Last  year, Hurlex manufactured 15,000 units and sold  12,000 units. Production costs for the year were as  follows: Sales totaled $840,000 for the year, variable selling  expenses totaled $60,000, and fixed selling and  administrative expenses totaled $180,000. There  were no units in the beginning inventory. Assume
Background image of page 27
that direct labor is a variable cost. Reference: 7-1 The contribution margin per unit would be: $39 $34 $95     QUESTION 13 On January 1, Barnes Company has 8,000 units of  Product A on hand. During the year, the company  plans to sell 30,000 units of Product A, and plans to  have 6,500 units on hand at year end. How many  units of Product A must be produced during the  year?