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Practice exam questions, managerial accounting

1. Dewiel Corporation manufactures a variety of products. The following data pertain to the company's operations over the last two years:

Variable costing net operating income, last year \$91,400
Variable costing net operating income, this year \$111,500
Increase in inventory, last year 1,700 units
Decrease in inventory, this year 1,200 units
Fixed manufacturing overhead cost per unit \$4.4

What was the absorption costing net operating income this year?

a.\$116,780
b.\$109,300
c.\$106,220
d.\$86,120

2. Hardin, Inc, has budgeted sales in units for the next five months as follows:

June 6,600 units
July 5,800 units
August 6,000 units
September 6,800 units
October 6,700 units

Past experience has shown that the ending inventory for each month should be equal to 17% of the next month's sales in units. The inventory on May 31 contained 1,122 units. The company needs to prepare a production budget for the next five months.

The total number of units produced in July should be:

a.5,800 units
b.6,820 units
c.5,766 units
d.5,834 units

Solution Preview

Your tutorial is in Excel (attached) explains how absorption and ...

Solution Summary

Your tutorial is in Excel (attached) explains how absorption and variable incomes differ and creates a schedule for both years to see the adjustments. A full four month production budget is created for you so you can see how these are computed. Click in cells to see computations.

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