Exam 4: Variable Costing and Segment Reporting: Tools for Management

A common fixed cost is a fixed cost that supports more than one business segment and is traceable in whole or in part to at least one of the business segments.

Crystal Corporation produces a single product.The company's variable costing income statement for the month of May appears below: The company produced 80, 000 units in May and the beginning inventory consisted of 25, 000 units.Variable production costs per unit and total fixed costs have remained constant over the past several months. Under absorption costing, for May the company would report a:

Nantua Corporation has two divisions, Southern and Northern.The following information was taken from last year's income statement segmented by division: Net operating income last year for Nantua Corporation was $400, 000. If the Northern Division's sales last year were $300, 000 higher, how would this have changed Nantua's net operating income? (Assume no change in selling prices, variable expenses per unit, or fixed expenses. )

Hatfield 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 variable costing?

Phong 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 $102, 340. The company's overall break-even sales is closest to:

If a cost is a common cost of the segments on a segmented income statement, the cost should:

Aaker 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 variable costing?

Data for March for Lazarus Corporation and its two major business segments, North and South, appear below: In addition, common fixed expenses totaled $156, 000 and were allocated as follows: $84, 000 to the North business segment and $72, 000 to the South business segment. A properly constructed segmented income statement in a contribution format would show that the segment margin of the North business segment is:

Keefe 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?

Last year, Walters Corporation's variable costing net operating income was $60, 800 and its inventory decreased by 200 units.Fixed manufacturing overhead cost was $3 per unit for both units in beginning and in ending inventory.What was the absorption costing net operating income last year?

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:

Under variable costing, which of the following is not expensed in its entirety in the period in which it is incurred?

Sidell Inc. , which produces a single product, has provided the following data for its most recent month of operation:

Under conventional absorption costing, the fixed costs associated with idle production capacity are not included as part of the product cost.

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

Crossbow Corp.produces a single product.Data concerning June's operations follow: Under variable costing, ending inventory on the balance sheet would be valued at:

Yankee Corporation manufactures a single product.The company has the following cost structure: Last year, 4, 000 units were produced and 3, 500 units were sold.There were no beginning inventories. Under variable costing, the unit product cost would be:

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

Hatfield 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 variable costing?

Bartelt Inc. , which produces a single product, has provided the following data for its most recent month of operations: There were no beginning or ending inventories.The absorption costing unit product cost was: