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

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: What is the variable costing unit product cost for the month?

Routsong Corporation had the following sales and production for the past four years: Selling price per unit, variable cost per unit, and total fixed cost are the same each year.There were no beginning inventories in Year 1.Which of the following statements is NOT correct?

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 this year?

Aaker 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 absorption costing?

Lee 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.Assume direct labor is a variable cost. Required: a.What is the unit product cost for the month under variable costing? b.What is the unit product cost for the month under absorption costing? c.Prepare a contribution format income statement for the month using variable costing. d.Prepare an income statement for the month using absorption costing. e.Reconcile the variable costing and absorption costing net operating incomes for the month.

Carrejo 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:

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 absorption costing, the cost of goods sold for the year would be:

Under variable costing, variable production costs are not treated as product costs.

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

Common fixed costs should not be charged to the individual segments when preparing a segmented income statement.

The following data were provided by Rider, Inc, which produces a single product: For the year in question, one would expect the net operating income under absorption costing to be:

Redstone Corporation produces a single product and has the following cost structure: 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!

Minick Corporation has two divisions: Grocery Division and Convenience 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. Required: a.What is the Grocery Division's break-even in sales dollars? b.What is the Convenience Division's break-even in sales dollars? c.What is the company's overall break-even in sales dollars? d.What would be the company's overall net operating income if the company operated at its two division's break-even points?

Sharron 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 variable costing unit product cost was:

A company produces a single product.Variable production costs are $12 per unit and variable selling and administrative expenses are $3 per unit.Fixed manufacturing overhead totals $36, 000 and fixed selling and administration expenses total $40, 000.Assuming a beginning inventory of zero, production of 4, 000 units and sales of 3, 600 units, the dollar value of the ending inventory under variable costing would be:

When using segmented income statements, the dollar sales for a company to break even equals the sum of the traceable fixed expenses and the common fixed expenses divided by the overall CM ratio.

Pevy Corporation has two divisions: Southern Division and Northern Division.The following data are for the most recent operating period: The common fixed expenses have been allocated to the divisions on the basis of sales. The Southern Division's break-even sales is closest to:

The principal difference between variable costing and absorption costing centers on:

Sosinski Corporation has two divisions: Domestic Division and Foreign Division.The following data are for the most recent operating period: The common fixed expenses have been allocated to the divisions on the basis of sales. The Domestic Division's break-even sales is closest to:

Last year, Rassel Corporation's variable costing net operating income was $63, 200.Fixed manufacturing overhead costs deferred in inventory under absorption costing amounted to $31, 900.What was the absorption costing net operating income last year?