Question 1

Absorption costing treats all manufacturing costs as product costs.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) $2,250 
B) $0 
C) $(73,080) 
D) $(359,080) 
A) $2,250 
B) $0 
C) $(73,080) 
D) $(359,080)

Question 3

The net operating income (loss)under absorption costing in Year 2 is closest to:

Accepted Answer

A) $31,000 
B) $26,000 
C) $132,000 
D) $92,000 
A) $31,000 
B) $26,000 
C) $132,000 
D) $92,000

Question 4

Combe Corporation has two divisions: Alpha and Beta.Data from the most recent month appear below:   The company's common fixed expenses total $80,800.The break-even in sales dollars for Alpha Division is closest to:

Accepted Answer

A) $491,129 
B) $143,478 
C) $187,536 
D) $260,580 
A) $491,129 
B) $143,478 
C) $187,536 
D) $260,580

Question 5

Muckleroy Corporation has two divisions: Division K and Division L.Data from the most recent month appear below:   Management has allocated common fixed expenses to the Divisions based on their sales.The break-even in sales dollars for Division K is closest to:

Accepted Answer

A) $244,103 
B) $206,154 
C) $174,359 
D) $470,945 
A) $244,103 
B) $206,154 
C) $174,359 
D) $470,945

Question 6

The net operating income (loss)under absorption costing in Year 2 is closest to:

Accepted Answer

A) $81,000 
B) $13,000 
C) $184,000 
D) $142,000 
A) $81,000 
B) $13,000 
C) $184,000 
D) $142,000

Question 7

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.

Accepted Answer

A) True 
 B)False

Question 8

What is the total cost that would be assigned to Beach Corporation's finished goods inventory at the end of the first year of operations under variable costing?

Accepted Answer

A) $43,200 
B) $45,600 
C) $55,200 
D) $64,800 
A) $43,200 
B) $45,600 
C) $55,200 
D) $64,800

Question 9

What was the absorption costing net operating income this year?

Accepted Answer

A) $81,000 
B) $83,000 
C) $115,000 
D) $123,000 
A) $81,000 
B) $83,000 
C) $115,000 
D) $123,000

Question 10

Toxemia Salsa Corporation manufactures five flavors of salsa.Last year, Toxemia generated net operating income of $40,000.The following information was taken from last year's income statement segmented by flavor (brackets indicate a negative amount):   Toxemia expects similar operating results for the upcoming year.If Toxemia wants to maximize its profitability in the upcoming year, which flavor or flavors should Toxemia discontinue?

Accepted Answer

A) no flavors should be discontinued 
B) Wimpy 
C) Wimpy and Mild 
D) Wimpy, Mild, and Medium 
A) no flavors should be discontinued 
B) Wimpy 
C) Wimpy and Mild 
D) Wimpy, Mild, and Medium

Question 11

What was Azuki Corporation's overall net operating income for last year?

Accepted Answer

A) $33,000 
B) $45,000 
C) $58,000 
D) $83,000 
A) $33,000 
B) $45,000 
C) $58,000 
D) $83,000

Question 12

Younie Corporation has two divisions: the South Division and the West Division.The corporation's net operating income is $26,900.The South Division's divisional segment margin is $42,800 and the West Division's divisional segment margin is $29,900.What is the amount of the common fixed expense not traceable to the individual divisions?

Accepted Answer

A) $56,800 
B) $69,700 
C) $72,700 
D) $45,800 
A) $56,800 
B) $69,700 
C) $72,700 
D) $45,800

Question 13

Murphy Inc., 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:
a.Compute the unit product cost under absorption costing.Show your work!
b.Compute the unit product cost under variable costing.Show your work!

Accepted Answer

a.Absorption costing

Question 14

A properly constructed segmented income statement in a contribution format would show that the net operating income of the company as a whole is:

Accepted Answer

A) $66,000 
B) ($144,000) 
C) $423,000 
D) $276,000 
A) $66,000 
B) ($144,000) 
C) $423,000 
D) $276,000

Question 15

The net operating income (loss)under absorption costing in Year 2 is closest to:

Accepted Answer

A) $87,000 
B) $136,000 
C) $75,000 
D) $186,000 
A) $87,000 
B) $136,000 
C) $75,000 
D) $186,000

Question 16

The net operating income (loss)under absorption costing in Year 1 is closest to:

Accepted Answer

A) $37,000 
B) $132,000 
C) $108,000 
D) $16,000 
A) $37,000 
B) $132,000 
C) $108,000 
D) $16,000

Question 17

Lean production should result in reduced inventories.If lean production is successfully implemented, the difference in net operating income computed under the absorption and variable costing methods should be reduced.

Accepted Answer

A) True 
 B)False

Question 18

Last year, Denogean Corporation's variable costing net operating income was $64,200 and ending inventory increased by 1,900 units.Fixed manufacturing overhead cost per unit was $4 in both beginning and ending inventory.
Required:
Determine the absorption costing net operating income for last year.Show your work!

Accepted Answer

Manufacturing overhead deferred in (rele

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Spiess Corporation has two major business segments--Apparel and Accessories.Data concerning those segments for December appear below:   Common fixed expenses totaled $309,000 and were allocated as follows: $142,000 to the Apparel business segment and $167,000 to the Accessories business segment.

Required:
Prepare a segmented income statement in the contribution format for the company.Omit percentages; show only dollar amounts.

Accepted Answer

The answer of Spiess Corporation has two major business segments--Apparel...

Absorption costing treats all manufacturing costs as product costs.

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

The net operating income (loss)under absorption costing in Year 2 is closest to:

Combe Corporation has two divisions: Alpha and Beta.Data from the most recent month appear below: The company's common fixed expenses total $80,800.The break-even in sales dollars for Alpha Division is closest to:

Muckleroy Corporation has two divisions: Division K and Division L.Data from the most recent month appear below: Management has allocated common fixed expenses to the Divisions based on their sales.The break-even in sales dollars for Division K is closest to:

The net operating income (loss)under absorption costing in Year 2 is closest to:

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.

What is the total cost that would be assigned to Beach Corporation's finished goods inventory at the end of the first year of operations under variable costing?

What was the absorption costing net operating income this year?

What was Azuki Corporation's overall net operating income for last year?

A properly constructed segmented income statement in a contribution format would show that the net operating income of the company as a whole is:

The net operating income (loss)under absorption costing in Year 2 is closest to:

The net operating income (loss)under absorption costing in Year 1 is closest to:

Lean production should result in reduced inventories.If lean production is successfully implemented, the difference in net operating income computed under the absorption and variable costing methods should be reduced.

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

Managerial Accounting and Cost Concepts

Job-Order Costing: Calculating Unit Product Costs

Job-Order Costing: Cost Flows and External Reporting

Activity-Based Costing

Process Costing6 Cost-Volume-Profit Relationships

Cost-Volume-Profit Relationships

Master Budgeting

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Flexible Budgets Standard Costs and Variance Analysis

Statement of Cash Flows

Financial Statement Analysis

Job-Order Costing: Cost Flows and External Reporting

Process Costing6 Cost-Volume-Profit Relationships

Cost-Volume-Profit Relationships

Flexible Budgets, Standard Costs, and Variance Analysis

Flexible Budgets, Standard Costs, and Variance Analysis

A Capital Budgeting Decisions

A Statement of Cash Flows

Filters

Exam 7: Variable Costing and Segment Reporting: Tools for Management

Absorption costing treats all manufacturing costs as product costs.

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

The net operating income (loss)under absorption costing in Year 2 is closest to:

Combe Corporation has two divisions: Alpha and Beta.Data from the most recent month appear below: The company's common fixed expenses total $80,800.The break-even in sales dollars for Alpha Division is closest to:

Muckleroy Corporation has two divisions: Division K and Division L.Data from the most recent month appear below: Management has allocated common fixed expenses to the Divisions based on their sales.The break-even in sales dollars for Division K is closest to:

The net operating income (loss)under absorption costing in Year 2 is closest to:

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.

What is the total cost that would be assigned to Beach Corporation's finished goods inventory at the end of the first year of operations under variable costing?

What was the absorption costing net operating income this year?

What was Azuki Corporation's overall net operating income for last year?

A properly constructed segmented income statement in a contribution format would show that the net operating income of the company as a whole is:

The net operating income (loss)under absorption costing in Year 2 is closest to:

The net operating income (loss)under absorption costing in Year 1 is closest to:

Lean production should result in reduced inventories.If lean production is successfully implemented, the difference in net operating income computed under the absorption and variable costing methods should be reduced.

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

Managerial Accounting and Cost Concepts

Job-Order Costing: Calculating Unit Product Costs

Job-Order Costing: Cost Flows and External Reporting

Activity-Based Costing

Process Costing6 Cost-Volume-Profit Relationships

Cost-Volume-Profit Relationships

Master Budgeting

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Flexible Budgets Standard Costs and Variance Analysis

Statement of Cash Flows

Financial Statement Analysis

Job-Order Costing: Cost Flows and External Reporting

Process Costing6 Cost-Volume-Profit Relationships

Cost-Volume-Profit Relationships

Flexible Budgets, Standard Costs, and Variance Analysis

Flexible Budgets, Standard Costs, and Variance Analysis

A Capital Budgeting Decisions

A Statement of Cash Flows

Filters