28 groovelex inc reports the following information units produced 550 units units so 4307784

28 groovelex inc reports the following information units produced 550 units units so 4307784

28) Groovelex Inc. reports the following information:

Units produced

550

units

Units sold

500

units

Sale price

$120

per unit

Direct materials

$25

per unit

Direct labor

$12

per unit

Variable manufacturing overhead

$13

per unit

Fixed manufacturing overhead

$16,500

per year

Variable selling and administrative costs

$6

per unit

Fixed selling and administrative costs

$12,500

per year

There are no beginning inventories. What is the ending balance in finished goods inventory using absorption costing?

A) $8,500

B) $8,000

C) $6,000

D) $4,000

29) Groovelex Inc. reports the following information:

Units produced

550

units

Units sold

500

units

Sale price

$120

per unit

Direct materials

$25

per unit

Direct labor

$12

per unit

Variable manufacturing overhead

$13

per unit

Fixed manufacturing overhead

$16,500

per year

Variable selling and administrative costs

$6

per unit

Fixed selling and administrative costs

$12,500

per year

There are no beginning inventories. What is the ending balance in finished goods inventory using variable costing?

A) $2,500

B) $7,000

C) $5,000

D) $6,000

30) Groovelex Inc. reports the following information for the year ended December 31, 2014:

Units sold

500

units

Sale price

$120

per unit

Direct materials

$25

per unit

Direct labor

$12

per unit

Variable manufacturing overhead

$13

per unit

Fixed manufacturing overhead

$16.50

per unit

Variable selling and administrative costs

$6

per unit

Fixed selling and administrative costs

$12,500

per year

The operating profit calculated using variable costing and absorption costing amounted to $9,270 and $11,250, respectively. There were no beginning inventories. Determine the total number of units produced during 2014.

A) 500 units

B) 620 units

C) 513 units

D) 120 units

31) Groovelex Inc. reports the following information for the year ended December 31, 2014:

Units sold

500

units

Sale price

$120

per unit

Direct materials

$25

per unit

Direct labor

$12

per unit

Variable manufacturing overhead

$13

per unit

Fixed manufacturing overhead

$16.50

per unit

Variable selling and administrative costs

$6

per unit

Fixed selling and administrative costs

$12,500

per year

The operating profit calculated using variable costing and absorption costing amounted to $9,270 and $11,250, respectively. There were no beginning inventories. Determine the total fixed manufacturing overhead that will be expensed under variable costing for the year 2014.

A) $10,230

B) $8,250

C) $20,750

D) $25,000

32) Groovelex Inc. reports the following information for the year ended December 31, 2014:

Units sold

500

units

Sale price

$120

per unit

Direct materials

$25

per unit

Direct labor

$12

per unit

Variable manufacturing overhead

$13

per unit

Fixed manufacturing overhead

$16.50

per unit

Variable selling and administrative costs

$6

per unit

Fixed selling and administrative costs

$12,500

per year

The operating profit calculated using variable costing and absorption costing amounted to $9,270 and $11,250, respectively. There were no beginning inventories. Determine the total fixed manufacturing overhead that will be expensed under absorption costing for the year 2014.

A) $10,230

B) $8,250

C) $20,750

D) $25,000

33) Under absorption costing, operating profit can be ________.

A) increased by increasing production without increasing sales

B) decreased by increasing production without decreasing sales

C) decreased by increasing the level of ending Finished Goods Inventory

D) increased by decreasing sales and keeping production equal to sales

34) In absorption costing, fixed manufacturing overhead is expensed ________.

A) when all the other non-manufacturing fixed costs are expensed

B) when the product is sold

C) at the end of the period in which it is paid

D) when the units are produced

35) The ________ method allows managers to manipulate operating profits through production.

A) absorption costing

B) variable costing

C) direct costing

D) marginal costing

36) Volplex Inc. produces paper and office supplies and uses the just-in-time inventory system. Currently, the company is using variable costing. Which of the following is true of the effect of costing systems on the financial results of Volplex?

A) Its operating profit will be significantly higher if the company uses absorption costing instead of variable costing.

B) Its operating profit will be significantly lower if the company uses absorption costing instead of variable costing.

C) Its operating profit will vary a little if the company uses absorption costing instead of variable costing.

D) Its operating profit will be negative if the company uses absorption costing instead of variable costing.

37) When there is no beginning inventory and all the goods that are produced are sold, the operating income ________.

A) will be higher under absorption costing than variable costing

B) will be lower under absorption costing than variable costing

C) will be higher than the gross profit under variable costing

D) will be the same for both absorption costing and variable costing

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