Exam 6: 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 variable costing in Year 1 is closest to:

Bryans 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:

Pacheo 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. 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.

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?

Danahy 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 last year?

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 variable costing, the company's net operating income for the year would be:

Tustin 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:

Neef 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:

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

Schlenz Incorporated, which produces a single product, has provided the following data for its most recent month of operation: The company had no beginning or ending inventories.Required:Compute the unit product cost under variable costing.

The Carlsbad Corporation produces and markets two types of electronic calculators: Model 4A and Model 5A. The following data were gathered on activities during the third quarter: Required: Prepare a segmented income statement for last quarter. The statement should provide sufficient detail to allow the company to evaluate the performance of the manager of each product line.

Tremble 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 49,000 units and sold 45,000 units. The company's only product is sold for $233 per unit.Assume that the company uses a variable costing system that assigns $11 of direct labor cost to each unit that is produced. The unit product cost under this costing system is:

Wyrich Corporation has two divisions: Blue Division and Gold Division. The following report is for the most recent operating period: What is the company's overall net operating income if it operates at the break-even points for its two divisions?

Corbel Corporation has two divisions: Division A and Division B. Last month, the company reported a contribution margin of $49,700 for Division A. Division B had a contribution margin ratio of 20% and its sales were $296,000. Net operating income for the company was $33,800 and traceable fixed expenses were $56,100. Corbel Corporation's common fixed expenses were:

Bryans Corporation has provided the following data for its two most recent years of operation: The net operating income (loss) under absorption costing in Year 1 is closest to:

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:

Shelko 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 42,000 units and sold 37,000 units. The company's only product is sold for $272 per unit.Required: a. Assume the company uses super-variable costing. Compute the unit product cost for the year and prepare an income statement for the year.b. Assume that the company uses an absorption costing system that assigns $28 of direct labor cost and $70 of fixed manufacturing overhead to each unit that is produced. Compute the unit product cost for the year and prepare an income statement for the year.c. Prepare a reconciliation that explains the difference between the super-variable costing and absorption costing net incomes.

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

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

Omstadt Corporation produces and sells only two products that are referred to as RIPS and PITS. Production is "for order" only, and no finished goods inventories are maintained; work in process inventories are negligible. The following data relate to last month's operations: $36,000 of the manufacturing overhead assigned to RIPS and $72,000 of that assigned to PITS is fixed. The balance of the overhead is variable. Selling expenses consist entirely of commissions paid as a percentage of sales. Direct labor is completely variable. Administrative expenses are fixed and cannot be traced to the products but have been arbitrarily allocated to the products. Required: Prepare a segmented income statement, in total and for the two products. Use the contribution approach.