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

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 last year?

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?

Under variable costing,fixed manufacturing overhead cost is not treated as a product cost.

DC Construction has two divisions: Remodeling and New Home Construction.Each division has an on-site supervisor who is paid a salary of $62,000 annually and one salaried estimator who is paid $36,000 annually.The corporate office has two office administrative assistants who are paid salaries of $40,000 and $32,000 annually.The president's salary is $138,000.How much of these salaries are common fixed expenses?

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 unit product cost for the month under variable costing?

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

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

A company that produces a single product had a net operating income of $75,000 using variable costing and a net operating income of $95,000 using absorption costing.Total fixed manufacturing overhead was $50,000 and production was 10,000 units both this year and last year.Last year was the first year of operations.Between the beginning and the end of the year,the inventory level:

Under absorption costing,fixed manufacturing overhead is treated as a product cost.

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:

Crossbow Corp.produces a single product.Data concerning June's operations follow: For the year in question,net operating income under variable costing will be:

Under conventional absorption costing,the fixed costs associated with idle production capacity are not included as part of the product cost.

Aaker Corporation,which has only one product,has provided the following data concerning its most recent month of operations: The total gross margin for the month under the absorption costing approach is:

O'Neill,Incorporated's segmented income statement for the most recent month is given below. For each of the following questions,refer back to the above original data. If sales in Store B increase by $30,000 as a result of a $5,000 increase in traceable fixed expenses:

The costs assigned to units in inventory are typically lower under variable costing than under absorption costing.

Farron 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?

O'Neill,Incorporated's segmented income statement for the most recent month is given below. For each of the following questions,refer back to the above original data. If Store B sales increase by $20,000 with no change in fixed expenses,the overall company net operating income should:

Harris Corporation produces a single product.Last year,Harris manufactured 17,000 units and sold 13,000 units.Production costs for the year were as follows: Sales were $780,000 for the year,variable selling and administrative expenses were $88,400,and fixed selling and administrative expenses were $170,000.There was no beginning inventory.Assume that direct labor is a variable cost. Under absorption costing,the ending inventory for the year would be valued at:

When using data from a segmented income statement,the dollar sales for the company to break even overall is equal to:

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?