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

Swifton Corporation produces a single product.Last year,the company had net operating income of $40,000 using variable costing.Beginning and ending inventories were 22,000 and 27,000 units,respectively.If the fixed manufacturing overhead cost was $3 per unit both last year and this year,what was the income using absorption costing?

Iancu 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?

If a cost must be arbitrarily allocated in order to be assigned to a particular segment,then that cost should not be considered a common cost.

Quinnett Corporation has two divisions: the Export Products Division and the Business Products Division.The Export Products Division's divisional segment margin is $34,300 and the Business Products Division's divisional segment margin is $86,700.The total amount of common fixed expenses not traceable to the individual divisions is $95,600.What is the company's net operating income?

Bateman 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 variable costing?

When variable costing is used,and if selling prices exceed variable expenses and if the unit contribution margins,the sales mix,and fixed costs remain the same,profits move in the same direction as sales.

Qabar Corporation,which has only one product,has provided the following data concerning its most recent month of operations: 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. )

Data for March concerning Mauger Corporation's two major business segments-Fibers and Feedstocks-appear below: Common fixed expenses totaled $461,000 and were allocated as follows: $249,000 to the Fibers business segment and $212,000 to the Feedstocks business segment. Required: Prepare a segmented income statement in the contribution format for the company.Omit percentages;show only dollar amounts.

Sechrest Corporation manufactures a single product.Last year,the company's variable costing net operating income was $80,500.Fixed manufacturing overhead costs released from inventory under absorption costing amounted to $18,400.What was the absorption costing net operating income last year?

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. Under absorption costing,what is the total cost that would be assigned to Carlos' finished goods inventory at the end of the first year of operations?

Sidell 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: Compute the unit product cost under absorption costing.Show your work!

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

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

Assuming the LIFO inventory flow assumption,if production is less than sales for the period,absorption costing net operating income will generally be greater than variable costing net operating income.

Jarvix 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?

Romasanta 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 this year?

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 company's overall break-even sales is closest to:

Cutterski Corporation manufactures a propeller.Shown below is Cutterski's cost structure: In its first year of operations,Cutterski produced 60,000 propellers but only sold 54,000. What is the total cost that would be assigned to Cutterski's finished goods inventory at the end of the first year of operations under variable costing?

Last year,Rochester Corporation's variable costing net operating income was $78,000.The fixed manufacturing overhead costs released from inventory under absorption costing amounted to $39,000. Required: Determine the absorption costing net operating income last year.Show your work!

When the number of units in work in process and finished goods inventories decrease,absorption costing net operating income will typically be greater than variable costing net operating income.