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Exam 6: Variable Costing and Segment Reporting: Tools for Management

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Question 51

Multiple Choice

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Caruso Incorporated, which produces a single product, has provided the following data for its most recent month of operations: There were no beginning or ending inventories.The unit product cost under variable costing was:

A) $115 per unit
B) $123 per unit
C) $118 per unit
D) $170 per unit

E) B) and D)
F) All of the above

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Question 52

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Absorption costing treats all fixed costs as product costs.

A) True
B) False

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Question 53

Multiple Choice

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Neef Corporation has provided the following data for its two most recent years of operation: The unit product cost under absorption costing in Year 2 is closest to:

Dukelow Corporation has two divisions: the Governmental Products Division and the Export Products Division. The Governmental Products Division's divisional segment margin is $255,000 and the Export Products Division's divisional segment margin is $59,800. The total amount of common fixed expenses not traceable to the individual divisions is $163,700. What is the company's net operating income?

Lenart Corporation has provided the following data for its two most recent years of operation: The unit product cost under variable costing in Year 1 is closest to:

Norenberg Corporation manufactures a single product. The following data pertain to the company's operations over the last two years: What was the absorption costing net operating income last year?

Neelon Corporation has two divisions: Southern Division and Northern Division. The following data are for the most recent operating period: The common fixed expenses have been allocated to the divisions on the basis of sales.The Northern Division's break-even sales is closest to:

Petteway Corporation has two divisions: Home Division and Commercial Division. The following report is for the most recent operating period: The common fixed expenses have been allocated to the divisions on the basis of sales.Required: a. What is the Home Division's break-even in sales dollars?b. What is the Commercial Division's break-even in sales dollars?c. What is the company's overall break-even in sales dollars?

Farris Corporation, which has only one product, has provided the following data concerning its most recent month of operations: What is the unit product cost for the month under variable costing?

Kneeland Corporation has two divisions: Grocery Division and Convenience Division. The following report is for the most recent operating period: The common fixed expenses have been allocated to the divisions on the basis of sales.Required:a. What is the Grocery Division's break-even in sales dollars?b. What is the Convenience Division's break-even in sales dollars?c. What is the company's overall break-even in sales dollars?d. What would be the company's overall net operating income if the company operated at its two division's break-even points?

Marcelin Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 51,000 units and sold 46,000 units. The company's only product is sold for $276 per unit.The net operating income for the year under super-variable costing is:

Mandato Corporation has provided the following data for its two most recent years of operation: The net operating income (loss) under variable costing in Year 2 is closest to:

Tat Corporation produces a single product and has the following cost structure: The unit product cost under variable costing is:

Moskowitz Corporation has provided the following data for its two most recent years of operation: The net operating income (loss) under absorption costing in Year 2 is closest to:

Schubert Corporation manufactures and sells one product. In the company's first year of operations, the variable cost consisted solely of direct materials of $86 per unit. The annual fixed costs were $510,000 of direct labor cost, $2,210,000 of fixed manufacturing overhead expense, and $1,209,000 of fixed selling and administrative expense. The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 34,000 units and sold 31,000 units. The company's only product is sold for $232 per unit. Required: a. Assume the company uses super-variable costing. Compute the unit product cost for the year and prepare an income statement for the year.b. Assume that the company uses a variable costing system that assigns $15 of direct labor cost to each unit that is produced. Compute the unit product cost for the year and prepare an income statement for the year.

Uchimura Corporation has two divisions: the AFE Division and the GBI Division. The corporation's net operating income is $12,400. The AFE Division's divisional segment margin is $84,600 and the GBI Division's divisional segment margin is $49,100. What is the amount of the common fixed expense not traceable to the individual divisions?

Ieso Corporation has two stores: J and K. During November, Ieso Corporation reported a net operating income of $30,000 and sales of $450,000. The contribution margin in Store J was $100,000, or 40% of sales. The segment margin in Store K was $30,000, or 15% of sales. Traceable fixed expenses are $60,000 in Store J, and $40,000 in Store K.Ieso Corporation's total fixed expenses for the year were:

Bertie Corporation has two divisions: Retail Division and Wholesale Division. The following data are for the most recent operating period: The common fixed expenses of the company are $103,360.The Retail Division's break-even sales is closest to:

A company that produces a single product had a net operating income of $82,000 using variable costing and a net operating income of $108,790 using absorption costing. Total fixed manufacturing overhead was $54,570 and production was 10,700 units. This year was the first year of operations. Between the beginning and the end of the year, the inventory level:

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: What is the variable costing unit product cost for the month?