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

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Question 101

True/False

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Variable costing net operating income is usually closer to the net cash flow of a period than is costing absorption net operating income.

A) True
B) False

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Question 102

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Cahalane Corporation has provided the following data for its two most recent years of operation: -Which of the following statements is true for Year 2?

A) The amount of fixed manufacturing overhead deferred in inventories is $60,000
B) The amount of fixed manufacturing overhead released from inventories is $60,000
C) The amount of fixed manufacturing overhead deferred in inventories is $592,000
D) The amount of fixed manufacturing overhead released from inventories is $592,000

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

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Question 103

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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?

Keyser 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 variable costing?

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

Truo Corporation produces a single product.Last year,the company had net operating income of $100,000 using variable costing.Beginning and ending inventories were 13,000 units and 18,000 units,respectively.If the fixed manufacturing overhead cost was $4 per unit both last year and this year,what would have been the net operating income using absorption costing?

Nuzum Corporation has two divisions: Division M and Division N.Data from the most recent month appear below: Management has allocated common fixed expenses to the Divisions based on their sales.The break-even in sales dollars for Division N is closest to:

Murphy Inc.,which produces a single product,has provided the following data for its most recent month of operation: The company had no beginning or ending inventories. Required: a.Compute the unit product cost under absorption costing.Show your work! b.Compute the unit product cost under variable costing.Show your work!

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.

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 company's overall break-even sales is closest to:

Carriveau Corporation has two divisions: Consumer Division and Business Division. The following data are for the most recent operating period: The company's common fixed expenses total $63,360. -The Consumer Division's break-even sales is closest to:

Clemeson 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:

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:

Under variable costing,an increase in fixed manufacturing overhead will affect the unit product cost.

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?

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?

When computing the break even for a segment,the calculations include the company's common fixed expenses.

Gabuat Corporation, which has only one product, has provided the following data concerning its most recent month of operations: -Under absorption costing,the unit product cost would be:

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

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: