Question

QUESTION 5

Last year, Kirsten Corporation's variable costing net operating income was $63,400. Fixed manufacturing overhead costs released from inventory under absorption costing amounted to $10,700. What was the absorption costing net operating income last year?

		$74,100
		$63,400
		$10,700
		$52,700

2.5 points   

QUESTION 6

The weighted-average method of process costing differs from the FIFO method of process costing in that the weighted-average method:

		will always yield a higher cost per equivalent unit.
		considers ending work in process inventory to be fully complete.
		does not consider the degree of completion of beginning work in process inventory when computing equivalent units of production.
		All of the choices are correct

Answer 1

QUESTION 5

Absorption costing net operating income = Variable costing net operating income - Fixed manufacturing overhead costs released from inventory

= $63,400 - $10,700

= $52,700

QUESTION 6

Equivalent production for a period under Weighted average method = Unist that are completed during the period + Equivalant units in process at the end of period.

The answer is - Does not consider the degree of completion of beginning work in process inventory when computing equivalent units of production.