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

Masley Corporation has provided the following data for its two most recent years of operation: In Year 1, 10,000 units were produced and in Year 2, 7,000 units were produced. Required: a. Assume the company uses absorption costing. Compute the unit product cost in each year. b. Assume the company uses variable costing. Compute the unit product cost in each year.

Farris 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?

Letcher Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 56,000 units and sold 54,000 units. The company's only product is sold for $227 per unit.The company is considering using either super-variable costing or a variable costing system that assigns $11 of direct labor cost to each unit that is produced. Which of the following statements is true regarding the net operating income in the first year?

Generally speaking, net operating income under variable and absorption costing will:

Last year, Rasband Corporation's variable costing net operating income was $57,000. The fixed manufacturing overhead costs deferred in inventory under absorption costing amounted to $30,000.Required:Determine the absorption costing net operating income last year.

Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations: What is the total period cost for the month under the absorption costing?

Keyser 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 absorption costing?

Olguin Corporation produces a single product and has the following cost structure: Required:a. Compute the unit product cost under absorption costing.b. Compute the unit product cost under variable costing.

Keyser 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?

Carroll Corporation has two products, Q and P. During June, the company's net operating income was $25,000, and the common fixed expenses were $37,000. The contribution margin ratio for Product Q was 30%, its sales were $200,000, and its segment margin was $21,000. If the contribution margin for Product P was $80,000, the segment margin for Product P was:

Sherwood Corporation has provided the following data for its two most recent years of operation: Required: a.Assume the company uses absorption costing. Compute the unit product cost in each year. b. Assume the company uses variable costing. Compute the unit product cost in each year. c. Assume the company uses absorption costing. Prepare an income statement for each year. d. Assume the company uses variable costing. Prepare an income statement for each year. e. Prepare a report in good form reconciling the variable costing and absorption costing net incomes.

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:

Columbia Corporation produces a single product. The company's variable costing income statement for November appears below: During November, 35,710 units were manufactured and 8,490 units were in beginning inventory. Variable production costs per unit, total fixed manufacturing expenses, and the number of units produced were the same in prior months.Under absorption costing, for November the company would report a:

Ferrar Corporation has two major business segments: Consumer and Commercial. Data for the segments and for the company for March appear below: In addition, common fixed expenses totaled $210,000 and were allocated as follows: $122,000 to the Consumer business segment and $88,000 to the Commercial business segment.A properly constructed segmented income statement in a contribution format would show that the segment margin of the Consumer business segment is:

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: The total contribution margin for the month under variable costing is:

Lenart Corporation has provided the following data for its two most recent years of operation: The unit product cost under absorption costing in Year 2 is closest to:

A cost that would be included in product costs under both absorption costing and variable costing is:

Younie Corporation has two divisions: the South Division and the West Division. The corporation's net operating income is $84,300. The South Division's divisional segment margin is $48,200 and the West Division's divisional segment margin is $172,000. What is the amount of the common fixed expense not traceable to the individual divisions?

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 variable costing, the unit product cost would be:

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