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

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?

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 absorption costing was:

Routit 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 correct?

Monce Corporation has two divisions: Home Division and Commercial 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 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?

Roskos Corporation has two divisions: Town Division and Country Division.The following report is for the most recent operating period: The company's common fixed expenses total $52,900. Required: a.What is the Town Division's break-even in sales dollars? b.What is the Country Division's break-even in sales dollars? c.What is the company's overall break-even in sales dollars?

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

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:

Craft Corporation produces a single product.Last year,the company had a net operating income of $80,000 using absorption costing and $74,500 using variable costing.The fixed manufacturing overhead cost was $5 per unit.There were no beginning inventories.If 21,500 units were produced last year,then sales last year were:

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:

Peterson Corporation produces a single product.Data from the company's records for last year follow: Under variable costing,net operating income would be:

A common fixed cost is a fixed cost that supports more than one business segment and is traceable in whole or in part to at least one of the business segments.

Managers will often allocate common fixed expenses to business segments because:

Oakes Corporation,which has only one product,has provided the following data concerning its most recent month of operations: Required: a.Prepare a contribution format income statement for the month using variable costing. b.Prepare an income statement for the month using absorption costing.

Mitchel Corporation manufactures a single product.Last year,variable costing net operating income was $55,000.The fixed manufacturing overhead costs released from inventory under absorption costing amounted to $24,000. Required: Determine the absorption costing net operating income last year.Show your work!

Rollison Corporation has two divisions: Retail Division and Wholesale Division.The following data are for the most recent operating period: The common fixed expenses of the company are $76,300. The Retail Division's break-even sales in dollars is closest to:

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

Martz Corporation manufactures a single product.The following data pertain to the company's operations over the last two years: Required: a.Determine the absorption costing net operating income for last year.Show your work! b.Determine the absorption costing net operating income for this year.Show your work!

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 variable costing?

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. The contribution margin of the South business segment is:

Because absorption costing emphasizes costs by behavior,it works well with cost-volume-profit analysis.