income was substantially below the budgeted amount. There was no beginning or ending inventories. The most likely explanation for the income shortfall is that, compared to budget, actual
42. A single-product company prepares income statements using both absorption and variable costing methods. Manufacturing overhead cost applied per unit produced in 2005 was the same as in 2004. The 2005 variable costing statement reported a profit, whereas the 2005 absorption costing statement reported a loss. The difference in reported income could be explained by the units produced in 2005 being
43. At the end of Killo Co.' s first year of operations, 1,000 units of inventory remained on hand. Variable and fixed manufacturing costs per unit were $ 90 and $ 20, respectively. If Killo uses absorption costing rather than direct( variable) costing, the result would be a higher pretax income of
44. Lynn Manufacturing Co. prepares income statements using both standard absorption and standard variable costing methods. For 2005, unit standard costs were unchanged from 2004. In 2005, the only beginning and ending inventories were finished goods of 5,000 units. How would Lynn ' s ratios using absorption costing compare with those using variable costing?
45. A direct labor overtime premium should be charged to a specific job when the overtime is caused by the 46. In a job cost system, manufacturing overhead is 47. Birk Co. uses a job order cost system. The following debits( credits) appeared in Birk ' s work in process account for the month of April 2005: Birk applies overhead to production at a predetermined rate of 80 % of the direct labor cost. Job No. 5, the only job still in process on April 30, 2005, was charged with direct labor of $ 2,000. What was the amount of direct materials charged to Job No. 5?
47.
48. A job order cost system uses a predetermined factory overhead rate based on expected volume and expected fixed