Question 1

The net operating income (loss) under absorption costing in Year 2 is closest to:

Accepted Answer

A)  $81,000
B)  $13,000
C)  $184,000
D)  $142,000E) C) and D)
F) None of the above

Question 2

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!

Accepted Answer

a.Absorption costing...

Question 3

Younie Corporation has two divisions: the South Division and the West Division.The corporation's net operating income is $26,900.The South Division's divisional segment margin is $42,800 and the West Division's divisional segment margin is $29,900.What is the amount of the common fixed expense not traceable to the individual divisions?

Accepted Answer

A)  $56,800
B)  $69,700
C)  $72,700
D)  $45,800E) A) and B)
F) B) and C)

Question 4

Muckleroy Corporation has two divisions: Division K and Division L.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 K is closest to:

Accepted Answer

A)  $244,103
B)  $206,154
C)  $174,359
D)  $470,945E) All of the above
F) B) and D)

Question 5

The net operating income (loss) under absorption costing in Year 2 is closest to:

Accepted Answer

A)  $31,000
B)  $26,000
C)  $132,000
D)  $92,000E) A) and C)
F) C) and D)

Question 6

Absorption costing treats all manufacturing costs as product costs.

Accepted Answer

A) True 
 B)False

Question 7

What was the absorption costing net operating income this year?

Accepted Answer

A)  $81,000
B)  $83,000
C)  $115,000
D)  $123,000E) A) and B)
F) A) and C)

Question 8

What is the company's overall net operating income if it operates at the break-even points for its two divisions?

Accepted Answer

A)  $2,250
B)  $0
C)  $(73,080) 
D)  $(359,080) E) A) and C)
F) A) and B)

Question 9

Variable manufacturing overhead costs are treated as product costs under both absorption and variable costing.

Accepted Answer

A) True 
 B)False

Question 10

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!

Accepted Answer

Manufacturing overhead deferred in (rele...

Question 11

Lean production should result in reduced inventories.If lean production is successfully implemented, the difference in net operating income computed under the absorption and variable costing methods should be reduced.

Accepted Answer

A) True 
 B)False

Question 12

A properly constructed segmented income statement in a contribution format would show that the net operating income of the company as a whole is:

Accepted Answer

A)  $66,000
B)  ($144,000) 
C)  $423,000
D)  $276,000E) B) and D)
F) B) and C)

Question 13

The net operating income (loss) under absorption costing in Year 1 is closest to:

Accepted Answer

A)  $37,000
B)  $132,000
C)  $108,000
D)  $16,000E) C) and D)
F) A) and B)

Question 14

When using segmented income statements, the dollar sales for a company to break even equals the traceable fixed expenses divided by the overall CM ratio.

Accepted Answer

A) True 
 B)False

Question 15

Spiess Corporation has two major business segments--Apparel and Accessories.Data concerning those segments for December appear below:  Common fixed expenses totaled $309,000 and were allocated as follows: $142,000 to the Apparel business segment and $167,000 to the Accessories business segment.

Required:
Prepare a segmented income statement in the contribution format for the company.Omit percentages; show only dollar amounts.

Accepted Answer

The answer of Spiess Corporation has two major business segments--Apparel...

Question 16

Toxemia Salsa Corporation manufactures five flavors of salsa.Last year, Toxemia generated net operating income of $40,000.The following information was taken from last year's income statement segmented by flavor (brackets indicate a negative amount) :  Toxemia expects similar operating results for the upcoming year.If Toxemia wants to maximize its profitability in the upcoming year, which flavor or flavors should Toxemia discontinue?

Accepted Answer

A)  no flavors should be discontinued
B)  Wimpy
C)  Wimpy and Mild
D)  Wimpy, Mild, and MediumE) A) and D)
F) B) and C)

Question 17

Combe Corporation has two divisions: Alpha and Beta.Data from the most recent month appear below:  The company's common fixed expenses total $80,800.The break-even in sales dollars for Alpha Division is closest to:

Accepted Answer

A)  $491,129
B)  $143,478
C)  $187,536
D)  $260,580E) A) and B)
F) B) and C)

Question 18

What is the total cost that would be assigned to Beach Corporation's finished goods inventory at the end of the first year of operations under variable costing?

Accepted Answer

A)  $43,200
B)  $45,600
C)  $55,200
D)  $64,800E) C) and D)
F) B) and C)

Question 19

What was Azuki Corporation's overall net operating income for last year?

Accepted Answer

A)  $33,000
B)  $45,000
C)  $58,000
D)  $83,000E) None of the above
F) A) and B)

Question 20

The net operating income (loss) under absorption costing in Year 2 is closest to:

Accepted Answer

A)  $87,000
B)  $136,000
C)  $75,000
D)  $186,000E) A) and D)
F) B) and C)

Exam 7: Variable Costing and Segment Reporting: Tools for Management

The net operating income (loss) under absorption costing in Year 1 is closest to:

Correct Answer
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Correct Answer
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The net operating income (loss) under absorption costing in Year 2 is closest to:

Correct Answer
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The net operating income (loss) under absorption costing in Year 2 is closest to:

Correct Answer
verified

What was Azuki Corporation's overall net operating income for last year?

Correct Answer
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Correct Answer
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Muckleroy Corporation has two divisions: Division K and Division L.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 K is closest to:

Correct Answer
verified

What was the absorption costing net operating income this year?

Correct Answer
verified

Lean production should result in reduced inventories.If lean production is successfully implemented, the difference in net operating income computed under the absorption and variable costing methods should be reduced.

Correct Answer
verified

Combe Corporation has two divisions: Alpha and Beta.Data from the most recent month appear below: The company's common fixed expenses total $80,800.The break-even in sales dollars for Alpha Division is closest to:

Correct Answer
verified

Correct Answer
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What is the total cost that would be assigned to Beach Corporation's finished goods inventory at the end of the first year of operations under variable costing?

Correct Answer
verified

Variable manufacturing overhead costs are treated as product costs under both absorption and variable costing.

Correct Answer
verified

Absorption costing treats all manufacturing costs as product costs.

Correct Answer
verified

A properly constructed segmented income statement in a contribution format would show that the net operating income of the company as a whole is:

Correct Answer
verified

The net operating income (loss) under absorption costing in Year 2 is closest to:

Correct Answer
verified

Correct Answer
verified
Manufacturing overhead deferred in (rele...
View Answer

When using segmented income statements, the dollar sales for a company to break even equals the traceable fixed expenses divided by the overall CM ratio.

Correct Answer
verified

What is the company's overall net operating income if it operates at the break-even points for its two divisions?

Correct Answer
verified

Correct Answer
verified
a.Absorption costing...
View Answer

Exam 7: Variable Costing and Segment Reporting: Tools for Management

The net operating income (loss) under absorption costing in Year 1 is closest to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The net operating income (loss) under absorption costing in Year 2 is closest to:

Correct AnswerverifiedShow Answer

The net operating income (loss) under absorption costing in Year 2 is closest to:

Correct AnswerverifiedShow Answer

What was Azuki Corporation's overall net operating income for last year?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Muckleroy Corporation has two divisions: Division K and Division L.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 K is closest to:

Correct AnswerverifiedShow Answer

What was the absorption costing net operating income this year?

Correct AnswerverifiedShow Answer

Lean production should result in reduced inventories.If lean production is successfully implemented, the difference in net operating income computed under the absorption and variable costing methods should be reduced.

Correct AnswerverifiedShow Answer

Combe Corporation has two divisions: Alpha and Beta.Data from the most recent month appear below: The company's common fixed expenses total $80,800.The break-even in sales dollars for Alpha Division is closest to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What is the total cost that would be assigned to Beach Corporation's finished goods inventory at the end of the first year of operations under variable costing?

Correct AnswerverifiedShow Answer

Variable manufacturing overhead costs are treated as product costs under both absorption and variable costing.

Correct AnswerverifiedShow Answer

Absorption costing treats all manufacturing costs as product costs.

Correct AnswerverifiedShow Answer

A properly constructed segmented income statement in a contribution format would show that the net operating income of the company as a whole is:

Correct AnswerverifiedShow Answer

The net operating income (loss) under absorption costing in Year 2 is closest to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedManufacturing overhead deferred in (rele...View AnswerShow Answer

When using segmented income statements, the dollar sales for a company to break even equals the traceable fixed expenses divided by the overall CM ratio.

Correct AnswerverifiedShow Answer

What is the company's overall net operating income if it operates at the break-even points for its two divisions?

Correct AnswerverifiedShow Answer

Correct Answerverifieda.Absorption costing...View AnswerShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Manufacturing overhead deferred in (rele...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified
a.Absorption costing...
View Answer