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

J Corporation has two divisions. Division A has a contribution margin of $79,300 and Division B has a contribution margin of $126,200. If total traceable fixed expenses are $72,400 and total common fixed expenses are $34,900, what is J Corporation's net operating income?

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?

Under variable costing, all variable production costs are treated as product costs.

Pungent Corporation manufactures and sells a spice rack. Shown below are the actual operating results for the first two years of operations: Pungent's selling price and unit variable cost and total fixed cost were the same for both years. What is Pungent's variable costing net operating income for Year 2?

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

The Southern Corporation manufactures a single product and has the following cost structure: Last year, 7,000 units were produced and 6,800 units were sold. There was no beginning inventory. Under absorption costing, the cost of goods sold for the year would be:

Miller Corporation produces a single product. The company had the following results for its first two years of operation: In Year 1, the company produced and sold 40,000 units of its only product; in Year 2, the company again sold 40,000 units, but increased production to 50,000 units. The company's variable production cost is $5 per unit and its fixed manufacturing overhead cost is $600,000 a year. Fixed manufacturing overhead costs are applied to the product on the basis of each year's unit production (i.e., a new fixed manufacturing overhead rate is computed each year). Variable selling and administrative expenses are $2 per unit sold. Required: a. Compute the unit product cost for each year under absorption costing and under variable costing. b. Prepare a contribution format income statement for each year using variable costing. c. Reconcile the variable costing and absorption costing income figures for each year. d. Explain why the net operating income for Year 2 under absorption costing was higher than the net operating income for Year 1, although the same number of units were sold in each year.

Neef Corporation has provided the following data for its two most recent years of operation: Which of the following statements is true for Year 1?

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.)

Nelter 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. Required: a. Prepare a contribution format income statement for the month using variable costing. b. Prepare an income statement for the month using absorption costing.

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