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

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Question 1

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Miscavage Corporation has two divisions: the Beta Division and the Alpha Division.The Beta Division has sales of $580,000,variable expenses of $301,600,and traceable fixed expenses of $186,500.The Alpha Division has sales of $510,000,variable expenses of $178,500,and traceable fixed expenses of $222,100.The total amount of common fixed expenses not traceable to the individual divisions is $235,500.What is the company's net operating income?

A) $374,400
B) $201,300
C) $609,900
D) ($34,200)

E) B) and D)
F) A) and D)

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Question 2

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Under variable costing,all variable production costs are treated as product costs.

A) True
B) False

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Question 3

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

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

Plummer 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 the LIFO inventory flow assumption,if the number of units in inventories increase between the beginning and end of the period,absorption costing net operating income will generally be greater than variable costing net operating income.

Elbrege Corporation manufactures a single product. The company has supplied the following data: There was no beginning inventory. During the year 25,000 units were produced and 20,000 units were sold. -The company's net operating income for the year under variable costing would be:

Lefelmann 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. 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.

Wolanski Corporation has provided the following data for its most recent year of operations: -The unit product cost under variable costing is closest to:

Segment margin is sales less variable expenses less traceable fixed expenses.

Jemmott Corporation has two divisions: Western Division and Eastern 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. -The Western Division's break-even sales is closest to:

Aaron 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:

Columbia Corporation produces a single product. The company's variable costing income statement for November appears below: During November, 35,000 units were manufactured and 8,000 units were in beginning inventory. Variable production costs have remained constant on a per unit basis over the past several months. -Under absorption costing,for November the company would report a:

Caruso Inc., which produces a single product, has provided the following data for its most recent month of operations: There were no beginning or ending inventories. -What is the total period cost for the month under variable costing?

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?

A manufacturing company that produces a single 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?

Last year,Denogean Corporation's variable costing net operating income was $64,200 and ending inventory increased by 1,900 units.Fixed manufacturing overhead cost per unit was $4 in both beginning and ending inventory. Required: Determine the absorption costing net operating income for last year.Show your work!

Smidt 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:

Boylston Corporation has provided the following data for its two most recent years of operation.The company makes a product that it sells for $75 per unit.It began Year 1 with no units in beginning inventory. Required: a.Assume the company uses absorption costing.Compute the unit product cost in each year. b.Assume the company uses variable costing.Compute the unit product cost in each year. c.Assume the company uses absorption costing.Prepare an income statement for each year. d.Assume the company uses variable costing.Prepare an income statement for each year.

Plummer 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: