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

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Question 21

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Krepps Corporation produces a single product. Last year, Krepps manufactured 20,000 units and sold 15,000 units. Production costs for the year were as follows: Sales totaled $825,000 for the year, variable selling and administrative expenses totaled $108,000, and fixed selling and administrative expenses totaled $165,000. There was no beginning inventory. Assume that direct labor is a variable cost. -Under variable costing,the company's net operating income for the year would be:

A) $101,250 lower than under absorption costing.
B) $60,000 lower than under absorption costing.
C) $101,250 higher than under absorption costing.
D) $60,000 higher than under absorption costing.

E) A) and D)
F) A) and C)

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Question 22

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How would the following costs be classified (product or period)under variable costing at a retail clothing store?

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Question 23

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Qadir 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.Prepare a contribution format income statement for the month using variable costing. c.Without preparing an income statement,determine the absorption costing net operating income for the month.(Hint: Use the reconciliation method.)

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

Vancott 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: Compute the unit product cost under absorption costing.Show your work!

Ferrar Corporation has two major business segments: Consumer and Commercial. Data for the segments and for the company for March appear below: In addition, common fixed expenses totaled $210,000 and were allocated as follows: $122,000 to the Consumer business segment and $88,000 to the Commercial business segment. -A properly constructed segmented income statement in a contribution format would show that the segment margin of the Consumer business segment is:

Carroll Corporation has two products,Q and P.During June,the company's net operating income was $25,000,and the common fixed expenses were $37,000.The contribution margin ratio for Product Q was 30%,its sales were $200,000,and its segment margin was $21,000.If the contribution margin for Product P was $80,000,the segment margin for Product P was:

Allocating common fixed expenses to business segments:

Danahy Corporation manufactures a single product. The following data pertain to the company's operations over the last two years: -What was the absorption costing net operating income this year?

Norenberg Corporation manufactures a single product. The following data pertain to the company's operations over the last two years: -What was the absorption costing net operating income last year?

Neef 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:

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:

Clemeson 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:

Mandato Corporation has provided the following data for its two most recent years of operation: -The net operating income (loss) under absorption costing in Year 2 is closest to:

Neef Corporation has provided the following data for its two most recent years of operation: -The net operating income (loss) under absorption costing in Year 2 is closest to:

A company that produces a single product had a net operating income of $65,000 using variable costing and a net operating income of $95,000 using absorption costing.Total fixed manufacturing overhead was $60,000 and production was 10,000 units.This year was the first year of operations.Between the beginning and the end of the year,the inventory level:

Rhea Corporation has provided the following data for its two most recent years of operation: The net operating income (loss) under absorption costing in Year 2 is closest to:

Gabuat 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 the absorption costing?

Plummer Corporation has provided the following data for its two most recent years of operation: -The unit product cost under variable costing in Year 1 is closest to: