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

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:

Nantor Corporation has two divisions, Southern and Northern. The following information was taken from last year's income statement segmented by division: Net operating income last year for Nantor Corporation was $800,000. If the Northern Division's sales last year were $600,000 higher, how would this have changed Nantor's net operating income? (Assume no change in selling prices, variable expenses per unit, or fixed expenses.)

Nantor Corporation has two divisions, Southern and Northern. The following information was taken from last year's income statement segmented by division: Net operating income last year for Nantor Corporation was $800,000. In last year's income statement segmented by division, what were Nantor's total common fixed expenses?

Lefelmann 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. What is the unit product cost for the month under variable costing? b. What is the unit product cost for the month under absorption costing? c. Prepare a contribution format income statement for the month using variable costing. d. Prepare an income statement for the month using absorption costing. e. Reconcile the variable costing and absorption costing net operating incomes for the month.

Under absorption costing, a portion of fixed manufacturing overhead cost is released from inventory when production volume exceeds sales volume.

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:

Uchimura Corporation has two divisions: the AFE Division and the GBI Division. The corporation's net operating income is $42,000. The AFE Division's divisional segment margin is $15,700 and the GBI Division's divisional segment margin is $175,400. What is the amount of the common fixed expense not traceable to the individual divisions?

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 Consumer Division's break-even sales is closest to:

Baraban Corporation has provided the following data for its most recent year of operation: The unit product cost under absorption costing is closest to:

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

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

Data for September concerning Greenberger Corporation's two major business segments--Fibers and Feedstocks--appear below: Common fixed expenses totaled $344,000 and were allocated as follows: $175,000 to the Fibers business segment and $169,000 to the Feedstocks business segment. Required: Prepare a segmented income statement in the contribution format for the company. Omit percentages; show only dollar amounts.

Moskowitz 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:

Neelon Corporation has two divisions: Southern Division and Northern 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. What is the company's overall net operating income if it operates at the break-even points for its two divisions?

Eyestone Corporation has two divisions, A and B. The following data pertain to operations in October: If common fixed expenses were $17,000, total fixed expenses were:

Therrell Corporation has two divisions: Bulb Division and Seed 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 Bulb Division's break-even in sales dollars? b. What is the Seed Division's break-even in sales dollars? c. What is the company's overall break-even in sales dollars?

Aaron 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 absorption costing?

Net operating income computed under variable costing would exceed net operating income computed using absorption costing if:

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.

Lenart 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: