acc205 assignment

Matric No: 14/66mc188
Serial No: F176

1. True
2. False
3. True
4. True
5. False
6. True 
7. False 
8. B
9. B
10. A
11. A 
12. B
13. Difference between absorption costing net income and variable costing net income = Change in inventory in units × Unit fixed manufacturing overhead
= (27,000 − 22,000) × 3 = 5,000 × 3 = #15,000
Net income under absorption costing = #40,000 + #15,000 = #55,000
14. Direct material + Direct labor + Variable manufacturing overhead
= Variable unit product cost = #9 – #1 = #8
Unit fixed manufacturing overhead = #11 – #8 = #3
Difference in net income between methods ÷ Unit fixed manufacturing overhead = (#3,600) ÷ #3 per unit = (1,200) units
Units produced = Units sold + Change in inventory = 10,000 + (1,200) = 8,800
15. Unit fixed manufacturing overhead = Difference in net income ÷ Change in inventory = (#44,000 – #38,000) ÷ (40,000 – 37,000) = #6,000 ÷ 3,000 = #2
Variable costing net operating income = Absorption costing net income − Difference in net operating income
= #52,000 − [(40,000 − 41,000) × #2)]
= #52,000 − (#2,000) = #54,000
16. Absorption costing net income = Variable costing net income − fixed manufacturing overhead costs released from inventory
= #52,400 − [1,400 × #8] = #52,400 − #11,200 = #41,200
17. 
unit selling price(#840000/12000) #70
less direct materials(#150000/15000) #10
less direct labour(#180000/15000) 12
less variable manufacturing overhead(#135000/15000) 9
less variable selling and administrative(#60000/12000) 5 #36
contribution margin. #34
18. Unit fixed manufacturing overhead = $210,000 ÷ 15,000 = $14
Unit product cost = Direct materials + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead
= #10 + #12 + #9 + #14 = #45
Carrying value = Unit product cost × Ending inventory in units
= #45 × (15,000 − 12,000) = #45 × 3,000 = #135,000
19. Unit fixed manufacturing overhead × Change in inventory in units
= #14 × (15,000 − 12,000) = #14 × 3,000 = #42,000