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

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:

Peals Corporation has two divisions: Home Division and Commercial Division.The following report is for the most recent operating period: The company's common fixed expenses total $125,280. Required: a.What is the Home Division's break-even in sales dollars? b.What is the Commercial Division's break-even in sales dollars? c.What is the company's overall break-even in sales dollars?

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?

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. The value of the company's inventory on May 31 under absorption costing would be:

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

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:

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:

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:

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?

Sproull 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: a.Compute the unit product cost under absorption costing.Show your work! b.Compute the unit product cost under variable costing.Show your work!

Under absorption costing,the profit for a period is affected by a change in the number of units of finished goods in inventory.

Clemmens Corporation has two major business segments: Consumer and Commercial.Data for the segments and for the company for August appear below: In addition,common fixed expenses totaled $265,000 and were allocated as follows: $135,000 to the Consumer business segment and $130,000 to the Commercial business segment. The contribution margin of the Commercial business segment is:

Hatfield 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?

Assuming the LIFO inventory flow assumption,if production equals sales for the period,absorption costing and variable costing will produce the same net operating income.

When production exceeds sales and the company uses the LIFO inventory flow assumption,the net operating income reported under absorption costing generally will be:

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.

Insider Corporation has two divisions,J and K.During March,the contribution margin in Division J was $30,000.The contribution margin ratio in Division K was 40%,its sales were $125,000,and its segment margin was $32,000.The common fixed expenses in the company were $40,000,and the company's net operating income was $18,000.The segment margin for Division J was:

Meyer Corporation has two sales areas: North and South.During April,the contribution margin in the North was $90,000,or 30% of sales.The segment margin in the South was $25,000,or 10% of sales.Traceable fixed expenses were $30,000 in the North and $15,000 in the South.Meyer Corporation reported a total net operating income of $52,000. The total sales for Meyer Corporation were:

A manufacturing company that produces a single 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?

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 the absorption costing?