Exam 4: Variable Costing and Segment Reporting: Tools for Management

Azuki Corporation operates in two sales territories, Urban and Rural. Data concerning last year's operations appear below: Azuki's common fixed expenses were $25,000 last year. What was Azuki Corporation's overall net operating income for last year?

Erie Corporation manufactures a single product that it sells for $35 per unit. The company has the following cost structure: There were no units in inventory at the beginning of the year. During the year 30,000 units were produced and 25,000 units were sold. Under absorption costing, the unit product cost would be:

Zable Corporation has two divisions: Town Division and Country Division. The following report is for the most recent operating period: The company's common fixed expenses total $68,320. Required: a. What is the Town Division's break-even in sales dollars? b. What is the Country Division's break-even in sales dollars? c. What is the company's overall break-even in sales dollars?

Moskowitz 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:

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 absorption costing?

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 absorption costing, the ending inventory for the year would be valued at:

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?

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:

Fowler Corporation manufactures a single product. Operating data for the company and its absorption costing income statements for the last two years are presented below: Variable manufacturing costs are $6 per unit. Fixed manufacturing overhead totals $72,000 in each year. This fixed manufacturing overhead is applied at the rate of $4 per unit. Variable selling and administrative expenses are $2 per unit sold. Required: a. Compute the unit product cost in each year under variable costing. b. Prepare new income statements for each year using variable costing. c. Reconcile the absorption costing and variable costing net operating income for each year.

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:

Azuki Corporation operates in two sales territories, Urban and Rural. Data concerning last year's operations appear below: Azuki's common fixed expenses were $25,000 last year. If operations in the Rural Sales Territory would have been discontinued at the beginning of last year, how would this have changed the net operating income of Azuki Corporation as a whole?

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:

Allocating common fixed costs to segments on segmented income statements increases the usefulness of such statements.

Elison Corporation, which has only one 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?

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

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:

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

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 this year?

Gabuat 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:

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