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

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Question 61

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Beamish 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.The absorption costing unit product cost was:

A) $93 per unit
B) $97 per unit
C) $136 per unit
D) $194 per unit

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

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Question 62

Multiple Choice

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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. -The unit product cost under variable costing was:

A) $115 per unit
B) $123 per unit
C) $118 per unit
D) $170 per unit

E) B) and C)
F) B) and D)

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Question 63

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Common fixed expenses should not be allocated to business segments when performing break-even calculations and making decisions.

Smidt 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:

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 variable costing?

Which of the following costs at a manufacturing company would be treated as a product cost under variable costing?

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?

Gulinson Corporation has two divisions: Division A and Division B.Data from the most recent month appear below: The break-even in sales dollars for Division A is closest to:

Kneeland Corporation has two divisions: Grocery Division and Convenience 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. Required: a.What is the Grocery Division's break-even in sales dollars? b.What is the Convenience Division's break-even in sales dollars? c.What is the company's overall break-even in sales dollars? d.What would be the company's overall net operating income if the company operated at its two division's break-even points?

Baughn 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 absorption costing?

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

Data for January for Bondi Corporation and its two major business segments, North and South, appear below: In addition, common fixed expenses totaled $179,000 and were allocated as follows: $93,000 to the North business segment and $86,000 to the South business segment. -The contribution margin of the South business segment is:

Ieso Corporation has two stores: J and K. During November, Ieso Corporation reported a net operating income of $30,000 and sales of $450,000. The contribution margin in Store J was $100,000, or 40% of sales. The segment margin in Store K was $30,000, or 15% of sales. Traceable fixed expenses are $60,000 in Store J, and $40,000 in Store K. -Ieso Corporation's total fixed expenses for the year were:

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

Gardella Corporation has two divisions: Domestic Division and Foreign 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 Foreign Division's break-even sales is closest to:

Ross Corporation produces a single product. The company has direct materials costs of $8 per unit, direct labor costs of $6 per unit, and manufacturing overhead of $10 per unit. Sixty percent of the manufacturing overhead is for fixed costs. In addition, variable selling and administrative expenses are $2 per unit, and fixed selling and administrative expenses are $3 per unit at the current activity level. Assume that direct labor is a variable cost. -Under absorption costing,the unit product cost is:

Omstadt Corporation produces and sells only two products that are referred to as RIPS and PITS.Production is "for order" only,and no finished goods inventories are maintained; work in process inventories are negligible.The following data relate to last month's operations: $36,000 of the manufacturing overhead assigned to RIPS and $72,000 of that assigned to PITS is fixed.The balance of the overhead is variable.Selling expenses consist entirely of commissions paid as a percentage of sales.Direct labor is completely variable.Administrative expenses are fixed and cannot be traced to the products but have been arbitrarily allocated to the products. Required: Prepare a segmented income statement,in total and for the two products.Use the contribution approach.

Aaron 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 absorption costing?

Wyrich Corporation has two divisions: Blue Division and Gold Division. The following report is for the most recent operating period: -What is the company's overall net operating income if it operates at the break-even points for its two divisions?

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