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

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Question 41

Multiple Choice

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

A) $128 per unit
B) $125 per unit
C) $202 per unit
D) $131 per unit

E) None of the above
F) All of the above

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Question 42

Multiple Choice

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Generally speaking, net operating income under variable and absorption costing will:

A) always be equal.
B) never be equal.
C) be equal only when production and sales are equal.
D) be equal only when production exceeds sales.

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

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Question 43

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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 segment margin of the East business segment is:

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:

Janos Corporation, which has only one product, has provided the following data concerning its most recent month of operations: The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month. What is the unit product cost for the month under absorption costing?

Foggs 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:

The salary paid to a store manager is not a traceable fixed expense of the store.

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 1 is closest to:

Chang Corporation has two divisions, T and W. The company's overall contribution margin ratio is 40%, with sales in the two divisions totaling $900,000. If variable expenses are $200,000 in Division T and if Division W's contribution margin ratio is 20%, the sales in Division W must be:

Which of the following is true of a company that uses absorption costing?

When using data from a segmented income statement, the dollar sales for a segment to break even is equal to:

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 absorption costing?

McCoy Corporation manufactures a computer monitor. Shown below is McCoy's cost structure: In its first year of operations, McCoy produced 100,000 monitors but only sold 95,000. McCoy's gross margin in this first year was $2,629,600. McCoy's contribution margin in this first year was $2,109,000. Under variable costing, what is McCoy's net operating income for its first year?

Janos Corporation, which has only one product, has provided the following data concerning its most recent month of operations: The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month. What is the net operating income for the month under absorption costing?

Moises Corporation manufactures a single product. Last year, the company's variable costing net operating income was $68,000 and ending inventory decreased by 900 units. Fixed manufacturing overhead cost per unit was $6 in both beginning and ending inventory. Required: Determine the absorption costing net operating income for last year. Show your work!

A reason why absorption costing income statements are sometimes difficult to interpret is that:

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

Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations: The total gross margin for the month under the absorption costing approach is:

Cahalane Corporation has provided the following data for its two most recent years of operation: Which of the following statements is true for Year 1?

Higado Confectionery Corporation has a number of store locations throughout North America. In income statements segmented by store, which of the following would be considered a common fixed cost with respect to the stores?