Deck 12: Super-Variable Costing

Question 1

The net operating income for the year under super-variable costing is:

A)$(210,000)
B)$532,000
C)$882,000
D)$399,000

Answer 1

D

Question 2

Quiller Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 32,000 units and sold 31,000 units. The company's only product is sold for $233 per unit. The company is considering using either super-variable costing or a variable costing system that assigns $12 of direct labor cost to each unit that is produced. Which of the following statements is true regarding the net operating income in the first year?

A)Super-variable costing net operating income exceeds variable costing net operating income by $63,000.
B)Super-variable costing net operating income exceeds variable costing net operating income by $12,000.
C)Variable costing net operating income exceeds super-variable costing net operating income by $12,000.
D)Variable costing net operating income exceeds super-variable costing net operating income by $63,000.

Answer 2

C

Question 3

Tisch Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 20,000 units and sold 13,000 units. The company's only product is sold for $242 per unit. The net operating income for the year under super-variable costing is:

A)$(109,000)
B)$507,000
C)$(676,000)
D)$(11,000)

Answer 3

A

Question 4

Under super-variable costing, which of the following is treated as a period cost?

A)Option A
B)Option B
C)Option C
D)Option D

Question 5

Assume that the company uses an absorption costing system that assigns $16 of direct labor cost and $70 of fixed manufacturing overhead to each unit that is produced. The net operating income under this costing system is:

A)$1,066,000
B)$856,000
C)$544,000
D)$808,000

Question 6

The net operating income for the year under super-variable costing is:

A)$856,000
B)$544,000
C)$808,000
D)$1,066,000

Question 7

The unit product cost under super-variable costing is:

A)$213 per unit
B)$88 per unit
C)$174 per unit
D)$104 per unit

Question 8

Super-variable costing is a costing method that treats direct labor and manufacturing overhead costs as period costs and includes only direct materials cost in unit product costs.

Question 9

Wahler Corporation manufactures and sells one product. In the company's first year of operations, the variable cost consisted solely of direct materials of $85 per unit. The annual fixed costs were $640,000 of direct labor cost, $2,208,000 of fixed manufacturing overhead expense, and $1,140,000 of fixed selling and administrative expense. The company does not have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 32,000 units and sold 30,000 units. The company's only product is sold for $249 per unit. The net operating income for the year under super-variable costing is:

A)$1,110,000
B)$932,000
C)$972,000
D)$762,000

Question 10

The super-variable costing net operating income period can be computed by multiplying the number of units sold by the contribution margin per unit and then subtracting total fixed costs.

Question 11

Albanese Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 36,000 units and sold 29,000 units. The company's only product is sold for $236 per unit. The company is considering using either super-variable costing or an absorption costing system that assigns $16 of direct labor cost and $72 of fixed manufacturing overhead to each unit that is produced. Which of the following statements is true regarding the net operating income in the first year?

A)Super-variable costing net operating income exceeds absorption costing net operating income by $616,000.
B)Absorption costing net operating income exceeds super-variable costing net operating income by $616,000.
C)Absorption costing net operating income exceeds super-variable costing net operating income by $504,000.
D)Super-variable costing net operating income exceeds absorption costing net operating income by $504,000.

Question 12

The unit product cost under super-variable costing is:

A)$88 per unit
B)$166 per unit
C)$110 per unit
D)$209 per unit

Question 13

Assume that the company uses a variable costing system that assigns $16 of direct labor cost to each unit that is produced. The unit product cost under this costing system is:

A)$104 per unit
B)$174 per unit
C)$88 per unit
D)$213 per unit

Question 14

Assume that the company uses a variable costing system that assigns $22 of direct labor cost to each unit that is produced. The unit product cost under this costing system is:

A)$88 per unit
B)$110 per unit
C)$209 per unit
D)$166 per unit

Question 15

All differences between super-variable costing and absorption costing are explained by:

A)the accounting for direct materials and manufacturing overhead costs.
B)the accounting for direct labor and direct materials.
C)the accounting for direct labor and manufacturing overhead costs.
D)the accounting for manufacturing overhead costs.

Question 16

Assume that the company uses a variable costing system that assigns $16 of direct labor cost to each unit that is produced. The net operating income under this costing system is:

A)$856,000
B)$544,000
C)$808,000
D)$1,066,000

Question 17

The net operating income for the year under super-variable costing is:

A)$802,000
B)$714,000
C)$880,000
D)$824,000

Question 18

Assume that the company uses an absorption costing system that assigns $16 of direct labor cost and $70 of fixed manufacturing overhead to each unit that is produced. The unit product cost under this costing system is:

A)$88 per unit
B)$213 per unit
C)$174 per unit
D)$104 per unit

Question 19

Assume that the company uses a variable costing system that assigns $22 of direct labor cost to each unit that is produced. The net operating income under this costing system is:

A)$714,000
B)$824,000
C)$802,000
D)$880,000

Question 20

All differences between super-variable costing and absorption costing net operating income are explained by the accounting for direct materials costs.

Question 21

Assume that the company uses an absorption costing system that assigns $19 of direct labor cost and $50 of fixed manufacturing overhead to each unit that is produced. The net operating income under this costing system is:

A)$882,000
B)$399,000
C)$(210,000)
D)$532,000

Question 22

Assume that the company uses an absorption costing system that assigns $19 of direct labor cost and $55 of fixed manufacturing overhead to each unit that is produced. The net operating income under this costing system is:

A)$1,321,000
B)$1,225,000
C)$1,395,000
D)$1,340,000

Question 23

The unit product cost under super-variable costing is:

A)$81 per unit
B)$109 per unit
C)$227 per unit
D)$179 per unit

Question 24

The net operating income for the year under super-variable costing is:

A)$78,000
B)$594,000
C)$351,000
D)$405,000

Question 25

The unit product cost under super-variable costing is:

A)$93 per unit
B)$171 per unit
C)$107 per unit
D)$219 per unit

Question 26

The company is considering using either super-variable costing or an absorption costing system that assigns $28 of direct labor cost and $70 of fixed manufacturing overhead to each unit that is produced. Which of the following statements is true regarding the net operating income in the first year?

A)Super-variable costing net operating income exceeds absorption costing net operating income by $6,000.
B)Absorption costing net operating income exceeds super-variable costing net operating income by $588,000.
C)Absorption costing net operating income exceeds super-variable costing net operating income by $6,000.
D)Super-variable costing net operating income exceeds absorption costing net operating income by $588,000.

Question 27

The unit product cost under super-variable costing is:

A)$167 per unit
B)$106 per unit
C)$212 per unit
D)$84 per unit

Question 28

The company is considering using either super-variable costing or an absorption costing system that assigns $25 of direct labor cost and $56 of fixed manufacturing overhead to each unit that is produced. Which of the following statements is true regarding the net operating income in the first year?

A)Super-variable costing net operating income exceeds absorption costing net operating income by $486,000.
B)Absorption costing net operating income exceeds super-variable costing net operating income by $336,000.
C)Absorption costing net operating income exceeds super-variable costing net operating income by $486,000.
D)Super-variable costing net operating income exceeds absorption costing net operating income by $336,000.

Question 29

The net operating income for the year under super-variable costing is:

A)$782,000
B)$446,000
C)$(202,000)
D)$296,000

Question 30

The company is considering using either super-variable costing or a variable costing system that assigns $22 of direct labor cost to each unit that is produced. Which of the following statements is true regarding the net operating income in the first year?

A)Variable costing net operating income exceeds super-variable costing net operating income by $427,000.
B)Variable costing net operating income exceeds super-variable costing net operating income by $154,000.
C)Super-variable costing net operating income exceeds variable costing net operating income by $154,000.
D)Super-variable costing net operating income exceeds variable costing net operating income by $427,000.

Question 31

Assume that the company uses a variable costing system that assigns $22 of direct labor cost to each unit that is produced. The unit product cost under this costing system is:

A)$212 per unit
B)$84 per unit
C)$167 per unit
D)$106 per unit

Question 32

The net operating income for the year under super-variable costing is:

A)$1,321,000
B)$1,225,000
C)$1,395,000
D)$1,340,000

Question 33

Assume that the company uses an absorption costing system that assigns $28 of direct labor cost and $70 of fixed manufacturing overhead to each unit that is produced. The unit product cost under this costing system is:

A)$81 per unit
B)$109 per unit
C)$227 per unit
D)$179 per unit

Question 34

Assume that the company uses a variable costing system that assigns $19 of direct labor cost to each unit that is produced. The net operating income under this costing system is:

A)$532,000
B)$399,000
C)$(210,000)
D)$882,000

Question 35

Assume that the company uses a variable costing system that assigns $28 of direct labor cost to each unit that is produced. The unit product cost under this costing system is:

A)$179 per unit
B)$227 per unit
C)$109 per unit
D)$81 per unit

Question 36

Assume that the company uses a variable costing system that assigns $18 of direct labor cost to each unit that is produced. The net operating income under this costing system is:

A)$78,000
B)$405,000
C)$351,000
D)$594,000

Question 37

The company is considering using either super-variable costing or a variable costing system that assigns $14 of direct labor cost to each unit that is produced. Which of the following statements is true regarding the net operating income in the first year?

A)Super-variable costing net operating income exceeds variable costing net operating income by $98,000.
B)Variable costing net operating income exceeds super-variable costing net operating income by $98,000.
C)Super-variable costing net operating income exceeds variable costing net operating income by $448,000.
D)Variable costing net operating income exceeds super-variable costing net operating income by $448,000.

Question 38

The company is considering using either super-variable costing or a variable costing system that assigns $25 of direct labor cost to each unit that is produced. Which of the following statements is true regarding the net operating income in the first year?

A)Super-variable costing net operating income exceeds variable costing net operating income by $150,000.
B)Super-variable costing net operating income exceeds variable costing net operating income by $336,000.
C)Variable costing net operating income exceeds super-variable costing net operating income by $336,000.
D)Variable costing net operating income exceeds super-variable costing net operating income by $150,000.

Question 39

The company is considering using either super-variable costing or a variable costing system that assigns $28 of direct labor cost to each unit that is produced. Which of the following statements is true regarding the net operating income in the first year?

A)Super-variable costing net operating income exceeds variable costing net operating income by $168,000.
B)Super-variable costing net operating income exceeds variable costing net operating income by $420,000.
C)Variable costing net operating income exceeds super-variable costing net operating income by $420,000.
D)Variable costing net operating income exceeds super-variable costing net operating income by $168,000.

Question 40

The net operating income for the year under super-variable costing is:

A)$1,291,000
B)$1,193,000
C)$542,000
D)$1,739,000

Question 41

Capello Corporation manufactures and sells one product. In the company's first year of operations, the variable cost consisted solely of direct materials of $93 per unit. The annual fixed costs were $675,000 of direct labor cost, $1,701,000 of fixed manufacturing overhead expense, and $780,000 of fixed selling and administrative expense. The company does not have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 27,000 units and sold 20,000 units. The company's only product is sold for $258 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year and prepare an income statement for the year.
b. Assume that the company uses an absorption costing system that assigns $25 of direct labor cost and $63 of fixed manufacturing overhead to each unit that is produced. Compute the unit product cost for the year and prepare an income statement for the year.

Question 42

Goodwyn Corporation manufactures and sells one product. In the company's first year of operations, the variable cost consisted solely of direct materials of $89 per unit. The annual fixed costs were $1,269,000 of direct labor cost, $3,619,000 of fixed manufacturing overhead expense, and $1,260,000 of fixed selling and administrative expense. The company does not have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 47,000 units and sold 42,000 units. The company's only product is sold for $259 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year and prepare an income statement for the year.
b. Assume that the company uses a variable costing system that assigns $27 of direct labor cost to each unit that is produced. Compute the unit product cost for the year and prepare an income statement for the year.

Question 43

Griffy Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 30,000 units and sold 23,000 units. The company's only product is sold for $239 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year and prepare an income statement for the year.
b. Assume that the company uses an absorption costing system that assigns $14 of direct labor cost and $70 of fixed manufacturing overhead to each unit that is produced. Compute the unit product cost for the year and prepare an income statement for the year.
c. Prepare a reconciliation that explains the difference between the super-variable costing and absorption costing net incomes.

Question 44

Rhoda Corporation manufactures and sells one product. In the company's first year of operations, the variable cost consisted solely of direct materials of $87 per unit. The annual fixed costs were $912,000 of direct labor cost, $2,128,000 of fixed manufacturing overhead expense, and $1,320,000 of fixed selling and administrative expense. The company does not have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 38,000 units and sold 33,000 units. The company's only product is sold for $240 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year.
b. Assume the company uses super-variable costing. Prepare an income statement for the year.

Question 45

Mendoza Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 47,000 units and sold 45,000 units. The company's only product is sold for $275 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year and prepare an income statement for the year.
b. Assume that the company uses a variable costing system that assigns $24 of direct labor cost to each unit that is produced. Compute the unit product cost for the year and prepare an income statement for the year.
c. Prepare a reconciliation that explains the difference between the super-variable costing and variable costing net incomes.

Question 46

Slezak Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 35,000 units and sold 31,000 units. The company's only product is sold for $264 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year and prepare an income statement for the year.
b. Assume that the company uses an absorption costing system that assigns $28 of direct labor cost and $68 of fixed manufacturing overhead to each unit that is produced. Compute the unit product cost for the year and prepare an income statement for the year.

Question 47

Calder Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 48,000 units and sold 45,000 units. The company's only product is sold for $258 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year.
b. Assume the company uses super-variable costing. Prepare an income statement for the year.

Question 48

Ellert Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 52,000 units and sold 51,000 units. The company's only product is sold for $251 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year and prepare an income statement for the year.
b. Assume that the company uses a variable costing system that assigns $26 of direct labor cost to each unit that is produced. Compute the unit product cost for the year and prepare an income statement for the year.

Question 49

Grand Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 23,000 units and sold 21,000 units. The company's only product is sold for $254 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year and prepare an income statement for the year.
b. Assume that the company uses a variable costing system that assigns $20 of direct labor cost to each unit that is produced. Compute the unit product cost for the year and prepare an income statement for the year.
c. Assume that the company uses an absorption costing system that assigns $20 of direct labor cost and $71 of fixed manufacturing overhead to each unit that is produced. Compute the unit product cost for the year and prepare an income statement for the year.
d. Prepare a reconciliation that explains the difference between the super-variable costing and variable costing net incomes.
e. Prepare a reconciliation that explains the difference between the super-variable costing and absorption costing net incomes.