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Exam 4: Variable Costing and Segment Reporting: Tools for Management

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Question 21

Multiple Choice

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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:

A) $522,000
B) $567,000
C) $137,000
D) $29,000

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

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Question 22

Multiple Choice

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A manufacturing company that produces a single 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?

A) $15,200
B) $(6,600)
C) $10,200
D) $5,000

E) None of the above
F) A) and D)

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Question 23

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If a cost must be arbitrarily allocated in order to be assigned to a particular segment, then that cost should be considered a common cost.

Assuming that direct labor is a variable cost, the primary difference between the absorption and variable costing is that:

Maher Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Required: a. What is the unit product cost for the month under variable costing? b. What is the unit product cost for the month under absorption costing? c. Prepare a contribution format income statement for the month using variable costing. d. Prepare an income statement for the month using absorption costing. e. Reconcile the variable costing and absorption costing net operating incomes for the month.

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?

Spiess Corporation has two major business segments--Apparel and Accessories. Data concerning those segments for December appear below: Common fixed expenses totaled $309,000 and were allocated as follows: $142,000 to the Apparel business segment and $167,000 to the Accessories business segment. Required: Prepare a segmented income statement in the contribution format for the company. Omit percentages; show only dollar amounts.

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: The total contribution margin for the month under variable costing is:

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: The total gross margin for the month under absorption costing is:

Helmers Corporation manufactures a single product. Variable costing net operating income last year was $86,000 and this year was $103,000. Last year, $32,000 in fixed manufacturing overhead costs were released from inventory under absorption costing. This year, $12,000 in fixed manufacturing overhead costs were deferred in inventory under absorption costing. What was the absorption costing net operating income this year?

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?

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:

Wyrich Corporation has two divisions: Blue Division and Gold Division. The following report is for the most recent operating period: The Gold Division's break-even sales is closest to:

WV Construction has two divisions: Remodeling and New Home Construction. Each division has an on-site supervisor who is paid a salary of $58,000 annually and one salaried estimator who is paid $52,000 annually. The corporate office has two office administrative assistants who are paid salaries of $38,000 and $31,000 annually. The president's salary is $127,000. How much of these salaries are common fixed expenses?

When reconciling variable costing and absorption costing net operating income, fixed manufacturing overhead costs deferred in inventory under absorption costing should be deducted from variable costing net operating income to arrive at the absorption costing net operating income.

Net operating income computed using absorption costing will always be less than net operating income computed using variable costing.

Wolanski Corporation has provided the following data for its most recent year of operations: The net operating income (loss) under variable costing is closest to:

Bellue Inc. manufactures a single product. Variable costing net operating income was $96,300 last year and its inventory decreased by 2,600 units. Fixed manufacturing overhead cost was $1 per unit for both units in beginning and in ending inventory. What was the absorption costing net operating income last year?

Bitonti Corporation has provided the following data for its most recent year of operation: The unit product cost under absorption costing is closest to:

Hadley 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?