Question 1

The unit product cost under variable costing is closest to:

Accepted Answer

A) $34.00 
B) $39.00 
C) $21.00 
D) $26.00 
A) $34.00 
B) $39.00 
C) $21.00 
D) $26.00

Question 2

What is the net operating income for the month under variable costing?

Accepted Answer

A) $4,600 
B) $11,600 
C) $24,200 
D) $7,000 
A) $4,600 
B) $11,600 
C) $24,200 
D) $7,000

Question 3

Sales in Store J totaled:

Accepted Answer

A) $400,000 
B) $250,000 
C) $150,000 
D) $100,000 
A) $400,000 
B) $250,000 
C) $150,000 
D) $100,000

Question 4

Nuzum Corporation has two divisions: Division M and Division N.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 N is closest to:

Accepted Answer

A) $248,747 
B) $496,987 
C) $183,544 
D) $303,405 
A) $248,747 
B) $496,987 
C) $183,544 
D) $303,405

Question 5

Succulent Juice Corporation manufactures and sells premium tomato juice by the gallon.Succulent just finished its first year of operations.The following data relates to this first year:   Required:
Using absorption costing, prepare Succulent Juice Corporation's income statement for the year.

Accepted Answer

Absorption costing unit product cost = V

Question 6

Waltzer 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 absorption costing.Prepare an income statement for each year.
c.Assume the company uses variable costing.Compute the unit product cost in 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.

Accepted Answer

a.Absorption costing unit product costs:

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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?

Accepted Answer

A) $149,100 
B) $57,700 
C) $217,400 
D) $191,100 
A) $149,100 
B) $57,700 
C) $217,400 
D) $191,100

Question 9

The Eastern Division's break-even sales is closest to:

Accepted Answer

A) $135,897 
B) $224,385 
C) $358,929 
D) $183,410 
A) $135,897 
B) $224,385 
C) $358,929 
D) $183,410

Question 10

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

Accepted Answer

A) units sold exceed units produced. 
B) units sold are less than units produced. 
C) units sold equal units produced. 
D) the average fixed cost per unit is zero. 
A) units sold exceed units produced. 
B) units sold are less than units produced. 
C) units sold equal units produced. 
D) the average fixed cost per unit is zero.

Question 11

What is the net operating income for the month under variable costing?

Accepted Answer

A) $12,000 
B) $(20,400) 
C) $5,600 
D) $6,400 
A) $12,000 
B) $(20,400) 
C) $5,600 
D) $6,400

Question 12

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

Accepted Answer

A) $137,000 
B) $198,000 
C) $29,000 
D) $243,000 
A) $137,000 
B) $198,000 
C) $29,000 
D) $243,000

Question 13

A reason why absorption costing income statements are sometimes difficult to interpret is that:

Accepted Answer

A) they omit variable expenses entirely in computing net operating income. 
B) they shift portions of fixed manufacturing overhead from period to period according to changing levels of inventories. 
C) they include all fixed manufacturing overhead on the income statement each year as a period cost. 
D) they ignore inventory levels in determining cost of goods sold. 
A) they omit variable expenses entirely in computing net operating income. 
B) they shift portions of fixed manufacturing overhead from period to period according to changing levels of inventories. 
C) they include all fixed manufacturing overhead on the income statement each year as a period cost. 
D) they ignore inventory levels in determining cost of goods sold.

Question 14

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

Accepted Answer

A) $255,000 
B) $270,000 
C) $200,000 
D) $280,000 
A) $255,000 
B) $270,000 
C) $200,000 
D) $280,000

Question 15

What is the net operating income for the month under absorption costing?

Accepted Answer

A) $7,000 
B) $4,600 
C) $11,600 
D) $24,200 
A) $7,000 
B) $4,600 
C) $11,600 
D) $24,200

Question 16

Which of the following statements is true for Year 2?

Accepted Answer

A) The amount of fixed manufacturing overhead released from inventories is $686,000 
B) The amount of fixed manufacturing overhead released from inventories is $24,000 
C) The amount of fixed manufacturing overhead deferred in inventories is $686,000 
D) The amount of fixed manufacturing overhead deferred in inventories is $24,000 
A) The amount of fixed manufacturing overhead released from inventories is $686,000 
B) The amount of fixed manufacturing overhead released from inventories is $24,000 
C) The amount of fixed manufacturing overhead deferred in inventories is $686,000 
D) The amount of fixed manufacturing overhead deferred in inventories is $24,000

Question 17

Davitt Corporation produces a single product and has the following cost structure:   Required:
Compute the unit product cost under variable costing.Show your work!

Accepted Answer

The answer of Davitt Corporation produces a single product and...

Question 18

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

Accepted Answer

A) $34,100 
B) $0 
C) $(69,020) 
D) $(260,020) 
A) $34,100 
B) $0 
C) $(69,020) 
D) $(260,020)

Question 19

A properly constructed segmented income statement in a contribution format would show that the segment margin of the North business segment is:

Accepted Answer

A) $105,000 
B) $383,000 
C) $198,000 
D) $184,000 
A) $105,000 
B) $383,000 
C) $198,000 
D) $184,000

Question 20

The unit product cost under absorption costing in Year 2 is closest to:

Accepted Answer

A) $9.00 
B) $19.00 
C) $28.00 
D) $33.00 
A) $9.00 
B) $19.00 
C) $28.00 
D) $33.00

The unit product cost under variable costing is closest to:

What is the net operating income for the month under variable costing?

Sales in Store J totaled:

Nuzum Corporation has two divisions: Division M and Division N.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 N is closest to:

Succulent Juice Corporation manufactures and sells premium tomato juice by the gallon.Succulent just finished its first year of operations.The following data relates to this first year: Required: Using absorption costing, prepare Succulent Juice Corporation's income statement for the year.

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

The Eastern Division's break-even sales is closest to:

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

What is the net operating income for the month under variable costing?

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

A reason why absorption costing income statements are sometimes difficult to interpret is that:

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

What is the net operating income for the month under absorption costing?

Which of the following statements is true for Year 2?

Davitt Corporation produces a single product and has the following cost structure: Required: Compute the unit product cost under variable costing.Show your work!

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

A properly constructed segmented income statement in a contribution format would show that the segment margin of the North business segment is:

The unit product cost under absorption costing in Year 2 is closest to:

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

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

The unit product cost under variable costing is closest to:

What is the net operating income for the month under variable costing?

Sales in Store J totaled:

Nuzum Corporation has two divisions: Division M and Division N.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 N is closest to:

Succulent Juice Corporation manufactures and sells premium tomato juice by the gallon.Succulent just finished its first year of operations.The following data relates to this first year: Required: Using absorption costing, prepare Succulent Juice Corporation's income statement for the year.

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

The Eastern Division's break-even sales is closest to:

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

What is the net operating income for the month under variable costing?

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

A reason why absorption costing income statements are sometimes difficult to interpret is that:

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

What is the net operating income for the month under absorption costing?

Which of the following statements is true for Year 2?

Davitt Corporation produces a single product and has the following cost structure: Required: Compute the unit product cost under variable costing.Show your work!

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

A properly constructed segmented income statement in a contribution format would show that the segment margin of the North business segment is:

The unit product cost under absorption costing in Year 2 is closest to:

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

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