ADM2341 N Quiz 2
Quiz 2 Managerial Accounting Winter 2012 SOLUTION ADM2341N Fodil Adjaoud
STUDENT NAME: STUDENT NUMBER:
You must sign the following Statement of Academic Integrity
The School of Management does not condone academic fraud, an act by a student that may result in a false academic evaluation of that student or of another student. Without limiting the generality of this definition, academic fraud occurs when a student commits any of the following offences: plagiarism or cheating of any kind, use of books, notes, mathematical tables, dictionaries or other study aid unless an explicit written note to the contrary appears on the exam, to have in his/her possession cameras, radios (radios with head sets), tape recorders, pagers, cell phones, or any other communication device which has not been previously authorized in writing.
Statement to be signed by the student:
I have read the text on academic integrity and I pledge not to have committed or attempted to commit academic fraud in this examination.
Signed:______________________________________
Note: an examination without this signed statement will not be graded and will receive an exam grade of zero.
QUESTION: 30 minutes maximum
ABC Inc. manufactures product A. The following data are for the first two years of operation:
Year 1
Year 2
Production in units
250,000
200,000
Sales in units
225,000
225,000
Sales
$3,825,000
$3,825,000
Total Materials and labour per unit
$6.00
$6.00
Variable overhead
$4.00
$4.00
Fixed overhead
$875,000
$875,000
Selling expenses-variable per unit
$2.00
$2.00
Selling expenses-fixed
$175,000
$175,000
REQUIRED:
1) Prepare Income Statement for each month using Absorption Costing Method
2) Prepare Income Statement for each month using Variable Costing
3) Reconcile Operating Income in 1) and 2)
4) Provide one advantage for using Absorption costing and one advantage for using variable costing.
SOLUTION
ABSORPTION COSTING
YEAR1
YEAR2
SALES
STUDENT NAME: STUDENT NUMBER:
You must sign the following Statement of Academic Integrity
The School of Management does not condone academic fraud, an act by a student that may result in a false academic evaluation of that student or of another student. Without limiting the generality of this definition, academic fraud occurs when a student commits any of the following offences: plagiarism or cheating of any kind, use of books, notes, mathematical tables, dictionaries or other study aid unless an explicit written note to the contrary appears on the exam, to have in his/her possession cameras, radios (radios with head sets), tape recorders, pagers, cell phones, or any other communication device which has not been previously authorized in writing.
Statement to be signed by the student:
I have read the text on academic integrity and I pledge not to have committed or attempted to commit academic fraud in this examination.
Signed:______________________________________
Note: an examination without this signed statement will not be graded and will receive an exam grade of zero.
QUESTION: 30 minutes maximum
ABC Inc. manufactures product A. The following data are for the first two years of operation:
Year 1
Year 2
Production in units
250,000
200,000
Sales in units
225,000
225,000
Sales
$3,825,000
$3,825,000
Total Materials and labour per unit
$6.00
$6.00
Variable overhead
$4.00
$4.00
Fixed overhead
$875,000
$875,000
Selling expenses-variable per unit
$2.00
$2.00
Selling expenses-fixed
$175,000
$175,000
REQUIRED:
1) Prepare Income Statement for each month using Absorption Costing Method
2) Prepare Income Statement for each month using Variable Costing
3) Reconcile Operating Income in 1) and 2)
4) Provide one advantage for using Absorption costing and one advantage for using variable costing.
SOLUTION
ABSORPTION COSTING
YEAR1
YEAR2
SALES