70.2K

Verified Solution

Link Copied!

George Company uses an absorption costing system based on standard costs. Total variable manufacturing costs, including direct materials, are $2.00 per unit. The standard production rate is 10 units per machine hour. Total budgeted and actual fixed manufacturing overhead costs are $420,000. Fixed manufacturing overhead is allocated at $6.00 per machine hour ($420,000 / 70,000 machine hours of denominator level). Selling price is $5.00 per unit. Variable operating costs, which are driven by units sold, are $1.20 per unit. Fixed operating costs are $124,000. Beginning inventory is 23,000 units; ending inventory is 43,000. Sales are 541,000 units. 561,000 units were produced. The same standard unit costs persisted throughout last year and this year. Assume that there are no variances except the volume variance. The volume variance should be closed to Cost of Goods Sold. The breakeven point using absorption costing is closest to O 302,222 O 173,122 172.833 O 303,229 George Company uses an absorption costing system based on standard costs. Total variable manufacturing costs, including direct materials, are $2.00 per unit. The standard production rate is 10 units per machine hour. Total budgeted and actual fixed manufacturing overhead costs are $420,000. Fixed manufacturing overhead is allocated at $6.00 per machine hour ($420,000 / 70,000 machine hours of denominator level). Selling price is $5.00 per unit. Variable operating costs, which are driven by units sold, are $1.20 per unit. Fixed operating costs are $124,000. Beginning inventory is 23,000 units: ending inventory is 43,000. Sales are 541,000 units. 561,000 units were produced. The same standard unit costs persisted throughout last year and this year. Assume that there are no variances except the volume variance. The volume variance should be closed to Cost of Goods Sold. The breakeven point using variable costing is closest to O 173,229 O 172,833 @ 302,222 304,332 George Company uses an absorption costing system based on standard costs. Total variable manufacturing costs, including direct materials, are $2.00 per unit. The standard production rate is 10 units per machine hour. Total budgeted and actual fixed manufacturing overhead costs are $420,000. Fixed manufacturing overhead is allocated at $6.00 per machine hour ($420,000 / 70,000 machine hours of denominator level). Selling price is $5.00 per unit. Variable operating costs, which are driven by units sold, are $1.20 per unit. Fixed operating costs are $124,000. Beginning inventory is 23,000 units; ending inventory is 43,000. Sales are 541,000 units. 561,000 units were produced. The same standard unit costs persisted throughout last year and this year. Assume that there are no variances except the volume variance. The volume variance should be closed to Cost of Goods Sold. The operating income using variable costing is closest to $429,800 O $441,800 O $443,100 O $432,800

Answer & Explanation Solved by verified expert

See Answer