Exam 5: Variable Costing and Segment Reporting: Tools for Management

Mossor Corporation has two major business segments-Retail and Wholesale.In December,the Retail business segment had sales revenues of $510,000,variable expenses of $296,000,and traceable fixed expenses of $61,000.During the same month,the Wholesale business segment had sales revenues of $510,000,variable expenses of $240,000,and traceable fixed expenses of $82,000.Common fixed expenses totaled $191,000 and were allocated as follows: $113,000 to the Retail business segment and $78,000 to the Wholesale business segment. Required: Prepare a segmented income statement in the contribution format for the company.Omit percentages;show only dollar amounts.

Carr Company produces a single product. During the past year, Carr manufactured 25,000 units and sold 20,000 units. Production costs for the year were as follows: -The contribution margin per unit would be:

The Gasson Company sells three products, Product A, Product B and Product C, and had sales of $1,000,000 during the month of June. The company's overall contribution margin ratio was 37% and fixed expenses totaled $350,000. Sales were: Product A, $500,000; Product B, $300,000; and Product C, $200,000. Traceable fixed costs were: Product A, $120,000; Product B, $100,000; and Product C, $60,000. The variable expenses of Product A were $300,000 and the variable expenses of Product B were $180,000. -The contribution margin in dollars for Product B for June was:

Segmented statements for internal use should be prepared in the contribution format.

Jarvinen Company, 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?

Selling and administrative expenses are considered to be:

When reconciling variable costing and absorption costing net operating income,fixed manufacturing overhead costs deferred in inventory under absorption costing should be added to variable costing net operating income to arrive at the absorption costing net operating income.

Clayton Company produces a single product.Last year,the company's variable production costs totaled $8,000 and its fixed manufacturing overhead costs totaled $4,800.The company produced 4,000 units during the year and sold 3,600 units.Assuming no units in the beginning inventory:

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: The total contribution margin for the month under variable costing is:

Data for June for Ozaki Corporation and its two major business segments, North and South, appear below: In addition, common fixed expenses totaled $145,000 and were allocated as follows: $73,000 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 segment margin of the North business segment is:

The Rial Company's income statement for June is given below: -During June,the sales clerks in Division F received salaries totaling $35,000.Assume that during July the salaries of these sales clerks are discontinued and instead they are paid a commission of 18% of sales.If sales in Division F increase by $65,000 as a result of this change,the July segment margin for Division F should be:

Hadlock Company, 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?

Kierst Company, 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?

Whitney, Inc., produces a single product. The following data pertain to one month's operations: -For the month referred to above,net operating income under variable costing will be:

Vanstee Corporation manufactures a variety of products. Variable costing net operating income last year was $60,000 and this year was $67,000. Last year, $37,000 in fixed manufacturing overhead costs were deferred in inventory under absorption costing. This year, $8,000 in fixed manufacturing overhead costs were released from inventory under absorption costing. -What was the absorption costing net operating income last year?

Galino Company, which has only one product, has provided the following data concerning its most recent month of operations: -The total contribution margin for the month under the variable costing approach is:

Gordon Company produces a single product that sells for $10 per unit. Last year there were no beginning inventories, 100,000 units were produced, and 80,000 units were sold. The company has the following cost structure: -Net operating income under variable costing would be:

More Company has two divisions,L and M.During July,the contribution margin in Division L was $60,000.The contribution margin ratio in Division M was 40% and its sales were $250,000.Division M's segment margin was $60,000.The common fixed expenses were $50,000 and the company net operating income was $20,000.The segment margin for Division L was:

Fixed costs that are traceable to a segment may become common if the segment is divided into smaller units.

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