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

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.The company's net operating income under variable costing would be:

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

Tustin 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:

Absorption costing treats all manufacturing costs as product costs.

Simila Corporation has provided the following data for its most recent year of operation: Which of the following statements is true?

WV Construction has two divisions: Remodeling and New Home Construction. Each division has an on-site supervisor who is paid a salary of $142,000 annually and one salaried estimator who is paid $76,000 annually. The corporate office has two office administrative assistants who are paid salaries of $80,000 and $52,000 annually. The president's salary is $198,000. How much of these salaries are common fixed expenses?

Corbel Corporation has two divisions: Division A and Division B. Last month, the company reported a contribution margin of $60,000 for Division A. Division B had a contribution margin ratio of 40% and its sales were $300,000. Net operating income for the company was $40,000 and traceable fixed expenses were $80,000. Corbel Corporation's common fixed expenses were:

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

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

Fausnaught Corporation has two major business segments--Retail and Wholesale. In October, the Retail business segment had sales revenues of $730,000, variable expenses of $409,000, and traceable fixed expenses of $117,000. During the same month, the Wholesale business segment had sales revenues of $400,000, variable expenses of $220,000, and traceable fixed expenses of $48,000. Common fixed expenses totaled $218,000 and were allocated as follows: $122,000 to the Retail business segment and $96,000 to the Wholesale business segment.Required:Prepare a segmented income statement in the contribution format for the company. Omit percentages; show only dollar amounts.

Dattilio 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 39,600 units and sold 38,200 units. The company's only product is sold for $246 per unit. Required:a. Assume the company uses super-variable costing. Compute the unit product cost for the year. b. Assume the company uses super-variable costing. Prepare an income statement for the year.

Smidt 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:

Clemeson 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:

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

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.Under absorption costing, the unit product cost would be:

Under super-variable costing, which of the following is treated as a period cost?

Maher 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. 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.

Bellue Incorporated manufactures a single product. Variable costing net operating income was $96,300 last year and its inventory decreased by 2,600 units. Fixed manufacturing overhead cost was $1 per unit for both units in beginning and in ending inventory. What was the absorption costing net operating income last year?

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:

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: