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

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 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:

Breedon Corporation produces a single product.Data concerning the company's operations last year appear below: Required: a.Compute the unit product cost under both absorption and variable costing. b.Prepare an income statement for the year using absorption costing. c.Prepare a contribution format income statement for the year using variable costing. d.Prepare a report reconciling the difference in net operating income between absorption and variable costing for the year.

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 Western Division's break-even sales is closest to:

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

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 this year?

Pratt Corporation has two major business segments-Apparel and Accessories.Data concerning those segments for October appear below: Common fixed expenses totaled $153,000 and were allocated as follows: $73,000 to the Apparel business segment and $80,000 to the Accessories business segment. Required: Prepare a segmented income statement in the contribution format for the company.Omit percentages;show only dollar amounts.

Segment margin is a better measure of the long-run profitability of a segment than contribution margin.

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 absorption costing?

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?

Hardee 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 unit product cost under variable costing was:

Johnston Corporation manufactures a single product that it sells for $30 per unit.The company has the following cost structure: Last year there was no beginning inventory.During the year,20,000 units were produced and 17,000 units were sold. Under absorption costing,the unit product cost would be:

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 net operating income of the company as a whole is:

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:

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

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. )

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:

Walkenhorst Corporation has two divisions: Bulb Division and Seed 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 Bulb Division's break-even in sales dollars? b.What is the Seed Division's break-even in sales dollars? c.What is the company's overall break-even in sales dollars?

Under variable costing,product cost does not contain any fixed manufacturing overhead cost.

Waltz Corporation has two divisions: Xi and Sigma.Data from the most recent month appear below: The company's common fixed expenses total $65,100.The break-even in sales dollars for Sigma Division is closest to: