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

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Question 141

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Fowler Corporation manufactures a single product.Operating data for the company and its absorption costing income statements for the last two years are presented below: Variable manufacturing costs are $6 per unit.Fixed manufacturing overhead totals $72,000 in each year.This fixed manufacturing overhead is applied at the rate of $4 per unit.Variable selling and administrative expenses are $2 per unit sold. Required: a.Compute the unit product cost in each year under variable costing. b.Prepare new income statements for each year using variable costing. c.Reconcile the absorption costing and variable costing net operating income for each year.

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a.The unit product cost under variable c...

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Question 142

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Delisa Corporation has two divisions: Division L and Division Q.Data from the most recent month appear below: The break-even in sales dollars for Division Q is closest to:

A) $352,635
B) $234,615
C) $403,635
D) $512,742

E) A) and B)
F) B) and C)

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Question 143

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Mckissic Corporation has two divisions: Domestic and Foreign.Data from the most recent month appear below: The break-even in sales dollars for the company as a whole is closest to:

Mccrone Corporation has provided the following data for its two most recent years of operation: The net operating income (loss) under variable costing in Year 1 is closest to:

Neef Corporation has provided the following data for its two most recent years of operation: -The net operating income (loss) under variable costing in Year 1 is closest to:

Gabuat Corporation, which has only one product, has provided the following data concerning its most recent month of operations: -The total contribution margin for the month under variable costing is:

Borunda Corporation has provided the following data for its two most recent years of operation: Required: a.Assume the company uses absorption costing.Prepare an income statement for each year. b.Assume the company uses variable costing.Prepare an income statement for each year. c.Prepare a report in good form reconciling the variable costing and absorption costing net incomes.

Silver Corporation produces a single product.Last year,the company's variable production costs totaled $7,500 and its fixed manufacturing overhead costs totaled $4,500.The company produced 3,000 units during the year and sold 2,400 units.There were no units in the beginning inventory.Which of the following statements is true?

Cadavieco Corporation has provided the following data for its two most recent years of operation: Required: a.Assume the company uses absorption costing.Compute the unit product cost in each year. b.Assume the company uses absorption costing.Prepare an income statement for each year. c.Assume the company uses variable costing.Compute the unit product cost in each year. d.Assume the company uses variable costing.Prepare an income statement for each year.

Beach Corporation, which produces a single product, budgeted the following costs for its first year of operations. These costs are based on a budgeted volume of 30,000 towels produced and sold: During the first year of operations, Beach Corporation actually produced 30,000 towels but only sold 24,000 towels. Actual costs did not fluctuate from the cost behavior patterns described above. The 24,000 towels were sold for $16 per towel. Assume that direct labor is a variable cost. -What is the total cost that would be assigned to Beach Corporation's finished goods inventory at the end of the first year of operations under variable costing?

Tubaugh Corporation has two major business segments--East and West. In December, the East business segment had sales revenues of $690,000, variable expenses of $352,000, and traceable fixed expenses of $104,000. During the same month, the West business segment had sales revenues of $140,000, variable expenses of $56,000, and traceable fixed expenses of $24,000. The common fixed expenses totaled $162,000 and were allocated as follows: $89,000 to the East business segment and $73,000 to the West business segment. -A properly constructed segmented income statement in a contribution format would show that the net operating income of the company as a whole is:

Neef 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:

Waltzer Corporation has provided the following data for its two most recent years of operation: Required: a.Assume the company uses absorption costing.Compute the unit product cost in each year. b.Assume the company uses absorption costing.Prepare an income statement for each year. c.Assume the company uses variable costing.Compute the unit product cost in each year. d.Assume the company uses variable costing.Prepare an income statement for each year. e.Prepare a report in good form reconciling the variable costing and absorption costing net incomes.

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?

Bryans 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:

Under variable costing,fixed manufacturing overhead is treated as a product cost.

Gardella Corporation has two divisions: Domestic Division and Foreign 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 company's overall break-even sales is closest to:

Fausnaught Corporation has two major business segments--Retail and Wholesale.In October,the Retail business segment had sales revenues of $730,000,variable expenses of $409,000,and traceable fixed expenses of $117,000.During the same month,the Wholesale business segment had sales revenues of $400,000,variable expenses of $220,000,and traceable fixed expenses of $48,000.Common fixed expenses totaled $218,000 and were allocated as follows: $122,000 to the Retail business segment and $96,000 to the Wholesale business segment. Required: Prepare a segmented income statement in the contribution format for the company.Omit percentages; show only dollar amounts.

Ing Corporation, which has only one product, has provided the following data concerning its most recent month of operations: -What is the net operating income for the month under variable costing?

The costing method that treats all fixed costs as period costs is: