80.

The contribution margin per unit during June was:

A) $20
B) $18
C) $16
D) $14

Ans: B AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting
LO: 2 Level: Medium

Solution:

Selling price ($285,000 ÷ 9,500) ........................... $30

Less variable product cost...................................... 10
Less unit variable selling and administrative
($19,000 ÷ 9,500) ............................................... 2
Unit contribution margin $18

81. The carrying value on the balance sheet of the company's inventory on June 30 under the
variable costing method would be:
A) $10,000
B) $12,000
C) $15,000
D) $24,000

Ans: C AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting
LO: 1 Level: Medium

Solution:

Ending inventory = Beginning inventory + Units produced − Units sold

= 1,000 + 10,000 − 9,500 = 1,500
Carrying value = Ending inventory in units × Variable production cost
= 1,500 × $10 = $15,000
82. Net operating income under the variable costing method for June would be:
A) $36,000
B) $40,000
C) $53,000
D) $60,000

Ans: A AACSB: Analytic AICPA BB: Critical Thinking

AICPA FN: Reporting LO: 2 Level: Medium

Solution:

Sales revenue (9,500 units) ................................... $285,000

Variable costs:
Variable cost of goods sold ($10 × 9,500) ......... $95,000
Variable selling and administrative.................... 19,000 114,000
Contribution margin .............................................. 171,000
Fixed costs:
Fixed manufacturing overhead ........................... $60,000
Fixed selling and administrative ........................ 75,000 135,000
Net operating income ............................................ $ 36,000

83. The break-even point in units for the month under variable costing would be:
A) 6,000 units
B) 6,750 units
C) 7,500 units
D) 9,000 units

Ans: C AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting
LO: 1 Level: Medium

Solution:

Sales revenue (9,500 units) ................................... $285,000

Variable costs:
Variable cost of goods sold ($10 × 9,500) ......... $95,000
Variable selling and administrative.................... 19,000 114,000
Contribution margin .............................................. $171,000
Fixed costs ÷ Unit contribution margin = (Fixed manufacturing overhead + Fixed selling
and administrative) ÷ Unit contribution margin = ($60,000 + $75,000) ÷ ($171,000 ÷
9,500) = $135,000 ÷ $18 per unit = 7,500 units
Use the following to answer questions 84-87:

Haaikon Company, which has only one product, has provided the following data concerning its
most recent month of operations:

Selling price ............................................... $86

Units in beginning inventory...................... 0

Units produced ........................................... 3,400
Units sold ................................................... 3,300
Units in ending inventory........................... 100

Variable costs per unit:

Direct materials ....................................... $17
Direct labor ............................................. $39
Variable manufacturing overhead ........... $1
Variable selling and administrative ........ $8

Fixed costs:
Fixed manufacturing overhead ............... $40,800
Fixed selling and administrative ............. $23,100

84. What is the unit product cost for the month under variable costing?
A) $77
B) $57
C) $69
D) $65