Accounting 225 Quiz Section #8

Chapter 6-1 Class Exercises

1. Fowler Co. manufactures a single product. Operating data for the company and its absorption
costing income statements for the last two years are presented below:

Variable manufacturing costs are $6 per unit.

Fixed manufacturing overhead totals $72,000 in each year. This overhead is applied at the
rate of $4 per unit.
Variable selling and administrative expenses are $2 per unit sold.

a) What was the unit product cost in each year under variable costing?

b) Prepare new income statements for each year using variable costing.

c) Reconcile the absorption costing and variable costing net operating income for each year.

Accounting 225 Quiz Section #8

Chapter 6-1 Class Exercises
2. Mafli Company, which has only one product, has provided the following data concerning its
most recent month of operations:

a) What is the unit product cost for the month under variable costing?

b) What is the unit product cost for the month under absorption costing?

c) Prepare a contribution format income statement for the month using variable costing.

d) Prepare a traditional format income statement for the month using absorption costing.

e) Reconcile the absorption costing and variable costing net operating income for the month.

Accounting 225 Quiz Section #8

Chapter 6-1 Class Exercises
3. Leibson Co, which has only one product, has provided the following data concerning its most
recent month of operations:

a) What is the unit product cost for the month under variable costing?

b) What is the unit product cost for the month under absorption costing?

c) Prepare a contribution format income statement for the month using variable costing.

d) Prepare a traditional format income statement for the month using absorption costing.

e) Reconcile the absorption costing and variable costing net operating income for the month.

Accounting 225 Quiz Section #8

Chapter 6-1 Class Exercises
4. Qiu Company, which has only one product, has provided the following data concerning its
most recent month of operations:

a) What is the unit product cost for the month under variable costing?

b) Prepare a contribution format income statement for the month using variable costing.

c) Without preparing an income statement, determine the absorption costing net operating
income for the month.