34. Temperance, Inc. is studying marketing cost and sales volume, and has genera

Question

34.

Temperance, Inc. is studying marketing cost and sales volume, and has generated the following information by use of a scatter diagram and a least-squares regression analysis:

Temperance is now preparing an estimate for monthly sales of 19,000 units. On the basis of the data presented, compute the most accurate sales forecast possible.

$171,400.

$159,300.

$163,800.

$166,900.

An amount other than those listed above.

35. Indiana Company incurred the following costs during the past year when planned production and actual production each totaled 20,000 units:

$28.00.

$33.00.

$40.50.

$9.50.

$25.00.

21. When units sold exceed units produced, absorption-costing income will be lower than variable-costing income.

True

False

22. DuChien Corporation recently produced and sold 195,000 units. Fixed costs at this level of activity amounted to $51,200; variable costs were $390,000. How much cost would the company anticipate if during the next period it produced and sold 200,000 units?

$451,200.

$452,200.

Some other amount not listed above.

$246,200.

$295,000.

25. Consider the following comments about absorption- and variable-costing income statements:

I. A variable-costing income statement discloses a firm's contribution margin.
II. Cost of goods sold on an absorption-costing income statement includes fixed costs.
III. The amount of variable selling and administrative cost is the same on absorption- and variable-costing income statements.

Which of the above statements is (are) true?

I only.

I, II, and III.

II only.

II and III.

I and II.

3. Which of the following conditions would cause absorption-costing income to be lower than variable-costing income?

Sales prices decreased.

Units sold equaled units produced.

Units sold exceeded units produced.

Units sold were less than units produced.

Selling expenses increased.

   Scatter Diagram Regression Analysis   Variable cost per unit sold $ 6.20     $ 6.60       Total monthly fixed cost $ 46,000     $ 41,500    

Explanation / Answer

34. out of scatter diagram and least squares regression analysis, least squares regression analysis is the best tool to estimate the forecasted cost

= 19000* 6.6 + 41500 = $166900

35. Total inventoriable cost :

Direct material used $280000

Direct labour $120000

Variable manufacturing overhead $160000

Fixed manufacturing overhead $100000

Total Inventoriable cost $ 660000

Inventoriable cost =  $660000 / 2000 units = $33

Selling and administrative costs are period costs and hence not added.

21. When units sold exceed units produced, absorption-costing income will be lower than variable-costing income.

False

22. 200000 * $2 + $51200 = $451200

25. I and II are true.

3. Units sold exceeded units produced.

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