In a period where opening inventories were 15,000 units and closing inventories were 20,000 units, a firm had a profit of $130,000 using absorption costing.

If the fixed overhead absorption rate was $8 per unit, the profit using marginal costing would be which of the following?

The following data is available on the production and sales for the first three years of a company’s new product.

Variable costs per unit, selling price and total fixed costs per year were constant over the three-year period. The company is considering the use of either marginal or absorption costing.

Which of the following statements is/are true?

1. Absorption costing will show a lower profit than marginal costing in Year 1
2. Marginal costing will show a lower closing inventory valuation than absorption costing in Year 2
3. Total profit over the three-year period will be the same under both methods

Cost and selling price details for product Z are as follows.

Budgeted production for the month was 5,000 units although the company managed to produce 5,800 units, selling 5,200 of them and incurring fixed overhead costs of $27,400.

What is the absorption costing profit for the month?

The following data is available for period 9.

What would be the profit for period 9 using marginal costing?

Cost and selling price details for product Z are as follows.

Budgeted production for the month was 5,000 units although the company managed to produce 5,800 units, selling 5,200 of them and incurring fixed overhead costs of $27,400.

What is the marginal costing profit for the month?

A company has established a marginal costing profit of $72,300. Opening inventory was 300 units and closing inventory is 750 units. The fixed production overhead absorption rate has been calculated as $5/unit.

What was the profit under absorption costing? $________

A company’s total operating cost is semi variable. It flexes its profit budget from an output level of 1,000 units to an output level of 2,000 units?

Which of the following statements is true?

The overhead absorption rate for product T is $4 per machine hour. Each unit of T requires 3 machine hours. Inventories of product T last period were:

Compared with the marginal costing profit for the period, the absorption costing profit for product T will be which of the following?

A company has the following budgeted costs and revenues:

In the most recent period, 2,000 units were produced and 1,000 units were sold. Actual sales price, variable production cost per unit and total fixed production costs were all as budgeted. Fixed production costs were over-absorbed by $4,000. There was no opening inventory for the period.

What would be the reduction in profit for the period if the company has used marginal costing rather than absorption costing?

HMF Co produces a single product. The budgeted fixed production overheads for the period are $500,000. The budgeted output for the period is 2,500 units. Opening inventory at the start of the period consisted of 900 units and closing inventory at the end of the period consisted of 300 units.

If absorption costing principles were applied, the profit for the period compared to the marginal costing profit would be which of the following?

A company produces and sells a single product whose variable cost is $6 per unit.

Fixed costs have been absorbed over the normal level of activity of 200,000 units and have been calculated as $2 per unit.

The current selling price is $10 per unit.

How much profit is made under marginal costing if the company sells 250,000 units?

A company manufactures and sells a single product. For this month the budgeted fixed production overheads are $48,000, budgeted production is 12,000 units and budgeted sales are 11,720 units.

The company currently uses absorption costing.

If the company used marginal costing principles instead of absorption costing for this month, what would be the effect on the budgeted profit?

In a period, a company had opening inventory of 31,000 units and closing inventory of 34,000 units.
Profits based on marginal costing were $850,500 and on absorption costing were $955,500.

If the budgeted total fixed costs for the company was $1,837,500, what was the budgeted level of activity in units?

A company had opening inventory of 48,500 units and closing inventory of 45,500 units. Profits based on marginal costing were $315,250 and on absorption costing were $288,250.

What is the fixed overhead absorption rate per unit?

Under absorption costing, the total cost of a product will include:

A company which uses marginal costing has a profit of $37,500 for a period. Opening inventory was 100 units and closing inventory was 350 units.

The fixed production overhead absorption rate is $4 per unit.

What is the profit under absorption costing?

Last month a manufacturing company's profit was $2,000, calculated using absorption costing principles. If marginal costing principles has been used, a loss of $3,000 would have occurred. The company's fixed production cost is $2 per unit. Sales last month were 10,000 units.

What was last month's production (in units)?

A company operates a standard marginal costing system. Last month its actual fixed overhead expenditure was 10% above budget resulting in a fixed overhead expenditure variance of $36,000.

What was the actual expenditure on fixed overheads last month?

Which of the following are acceptable bases for absorbing production overheads?

1. Direct labour hours
2. Machine hours
3. As a percentage of the prime cost
4. Per unit

Last month, when a company had an opening inventory of 16,500 units and a closing inventory of 18,000 units, the profit using absorption costing was $40,000. The fixed production overhead rate was $10 per unit.

What would the profit for last month have been using marginal costing?

$_______