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

Pabbatti 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.(Hint: Use the reconciliation method. )

During its first year of operations, Carlos Manufacturing Corporation incurred the following costs to produce 8, 000 units of its only product: The company also incurred the following costs in selling 7, 500 units of product during its first year: Assume that direct labor is a variable cost. If Carlos' absorption costing net operating income for this first year is $118, 125, what would its variable costing net operating income be for this first year?

The following data were provided by Rider, Inc, which produces a single product: Under absorption costing, the unit product cost is:

Kadle Corporation has two divisions: Division L and Division Q.Data from the most recent month appear below: The break-even in sales dollars for Division Q is closest to:

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

Kosco Corporation produces a single product.The company's absorption costing income statement for March follows: During March, the company's variable production costs were $8 per unit and its fixed manufacturing overhead totaled $5, 000. The contribution margin per unit during March was:

Criblez 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?

If a company operates at the break even point for each of its segments, it will lose money overall if common fixed expenses exist.

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

Peterson Corporation produces a single product.Data from the company's records for last year follow: Under variable costing the value of the ending finished goods inventory would be:

Schweinert 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?

Yuvil Corporation produces a single product.At the end of the company's first year of operations, 1, 000 units of inventory remained on hand.Its variable manufacturing overhead cost is $45 per unit and its fixed manufacturing overhead cost is $10 per unit.Yuvil's absorption costing net operating income would be higher than its variable costing net operating income by:

Direct materials is considered to be a product cost under variable costing but not absorption costing.

Kosco Corporation produces a single product.The company's absorption costing income statement for March follows: During March, the company's variable production costs were $8 per unit and its fixed manufacturing overhead totaled $5, 000. The break-even point in units for the month under variable costing would be:

Ragins Corporation produces a single product and has the following cost structure: The absorption costing unit product cost is:

Common fixed expenses should be allocated to business segments when performing break-even calculations and making decisions.

Lasorsa Corporation manufactures a single product.Variable costing net operating income last year was $86, 000 and this year was $98, 000.Last year, $4, 000 in fixed manufacturing overhead costs were released from inventory under absorption costing.This year, $27, 000 in fixed manufacturing overhead costs were deferred in inventory under absorption costing. What was the absorption costing net operating income last year?

Cervetti Corporation has two major business segments-East and West.In July, the East business segment had sales revenues of $220, 000, variable expenses of $125, 000, and traceable fixed expenses of $29, 000.During the same month, the West business segment had sales revenues of $890, 000, variable expenses of $472, 000, and traceable fixed expenses of $169, 000.The common fixed expenses totaled $246, 000 and were allocated as follows: $123, 000 to the East business segment and $123, 000 to the West business segment. The contribution margin of the West 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. The company's overall break-even sales is closest to:

Cervetti Corporation has two major business segments-East and West.In July, the East business segment had sales revenues of $220, 000, variable expenses of $125, 000, and traceable fixed expenses of $29, 000.During the same month, the West business segment had sales revenues of $890, 000, variable expenses of $472, 000, and traceable fixed expenses of $169, 000.The common fixed expenses totaled $246, 000 and were allocated as follows: $123, 000 to the East business segment and $123, 000 to the West business segment. A properly constructed segmented income statement in a contribution format would show that the segment margin of the East business segment is: