Question 1

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

Accepted Answer

A) $95 
B) $119 
C) $61 
D) $56 
A) $95 
B) $119 
C) $61 
D) $56

Question 2

Ring, Incorporated's income statement for the most recent month is given below.
  
For each of the following questions, refer back to the original data. 
-A proposal has been made that will lower variable costs in Store P to 65% of sales.However,this reduction can only be accomplished by a $16,000 increase in Store P's traceable fixed costs.If this proposal is implemented and sales remain constant,overall company net operating income should:

Accepted Answer

A) remain the same 
B) decrease by $2,000 
C) increase by $2,000 
D) increase by $14,000 
A) remain the same 
B) decrease by $2,000 
C) increase by $2,000 
D) increase by $14,000

Question 3

A common cost that should not be assigned to a particular product on a segmented income statement is:

Accepted Answer

A) the product's advertising costs. 
B) the salary of the corporation president. 
C) direct materials costs. 
D) the product manager's salary. 
A) the product's advertising costs. 
B) the salary of the corporation president. 
C) direct materials costs. 
D) the product manager's salary.

Question 4

Hubiak Corporation produces a single product and has the following cost structure:   Required:
Compute the unit product cost under absorption costing.Show your work!

Accepted Answer

The answer of Hubiak Corporation produces a single product and...

Question 5

Falquez Company sells three products: R, S, and T. Data for activity of Falquez Company during July are as follows:  Common fixed expenses for July amounted to $90,000.
-The contribution margin for Product R was:

Accepted Answer

A) $48,750 
B) $63,500 
C) $51,000 
D) $48,000 
A) $48,750 
B) $63,500 
C) $51,000 
D) $48,000

Question 6

Stryker Corporation has two major business segments-East and West. In April, the East business segment had sales revenues of $500,000, variable expenses of $280,000, and traceable fixed expenses of $80,000. During the same month, the West business segment had sales revenues of $970,000, variable expenses of $514,000, and traceable fixed expenses of $184,000. The common fixed expenses totaled $280,000 and were allocated as follows: $112,000 to the East business segment and $168,000 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:

Accepted Answer

A) $108,000 
B) $28,000 
C) $140,000 
D) $280,000 
A) $108,000 
B) $28,000 
C) $140,000 
D) $280,000

Question 7

Elbon 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 absorption costing?

Accepted Answer

A) $1,400 
B) $(19,000) 
C) $8,800 
D) $10,200 
A) $1,400 
B) $(19,000) 
C) $8,800 
D) $10,200

Question 8

Dull Corporation has been producing and selling electric razors for the past ten years.Shown below are the actual net operating incomes for the last three years of operations at Dull:   Dull Corporation's cost structure and selling price has not changed during its ten years of operations.Based on the information presented above,which of the following statements is true?

Accepted Answer

A) Dull Corporation operated above the breakeven point in each of the three years presented. 
B) For the three years presented in total,Dull Corporation sold more units than it produced. 
C) In Year 10,Dull Corporation produced fewer units than it sold. 
D) In Year 9,Dull Corporation produced more units than it sold. 
A) Dull Corporation operated above the breakeven point in each of the three years presented. 
B) For the three years presented in total,Dull Corporation sold more units than it produced. 
C) In Year 10,Dull Corporation produced fewer units than it sold. 
D) In Year 9,Dull Corporation produced more units than it sold.

Question 9

Evans Company produces a single product.During the most recent year,the company had a net operating income of $90,000 using absorption costing and $84,000 using variable costing.The fixed overhead application rate was $6 per unit.There were no beginning inventories.If 22,000 units were produced last year,then sales for last year were:

Accepted Answer

A) 15,000 units 
B) 21,000 units 
C) 23,000 units 
D) 28,000 units 
A) 15,000 units 
B) 21,000 units 
C) 23,000 units 
D) 28,000 units

Question 10

Stephen Company produces a single product.Last year,the company had 20,000 units in its ending inventory.During the year,Stephen's variable production costs were $12 per unit.The fixed manufacturing overhead cost was $8 per unit in the beginning inventory.The company's net operating income for the year was $9,600 higher under variable costing than it was under absorption costing.The company uses a last-in-first-out (LIFO)inventory flow assumption.Given these facts,the number of units of product in the beginning inventory last year must have been:

Accepted Answer

A) 21,200 
B) 19,200 
C) 18,800 
D) 19,520 
A) 21,200 
B) 19,200 
C) 18,800 
D) 19,520

Question 11

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 absorption costing?

Accepted Answer

A) $7,500 
B) $16,200 
C) $6,200 
D) $10,600 
A) $7,500 
B) $16,200 
C) $6,200 
D) $10,600

Question 12

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 net operating income for the month under absorption costing?

Accepted Answer

A) $2,900 
B) $0 
C) $8,700 
D) $11,600 
A) $2,900 
B) $0 
C) $8,700 
D) $11,600

Question 13

Abe 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:

Accepted Answer

A) $162,600 
B) $378,000 
C) $226,800 
D) $319,200 
A) $162,600 
B) $378,000 
C) $226,800 
D) $319,200

Question 14

Moore Company produces a single product.During last year,Moore's variable production costs totaled $10,000 and its fixed manufacturing overhead costs totaled $6,800.The company produced 5,000 units during the year and sold 4,600 units.There were no units in the beginning inventory.Which of the following statements is true?

Accepted Answer

A) The net operating income under absorption costing for the year will be $800 higher than net operating income under variable costing. 
B) The net operating income under absorption costing for the year will be $544 higher than net operating income under variable costing. 
C) The net operating income under absorption costing for the year will be $544 lower than net operating income under variable costing. 
D) The net operating income under absorption costing for the year will be $800 lower than net operating income under variable costing. 
A) The net operating income under absorption costing for the year will be $800 higher than net operating income under variable costing. 
B) The net operating income under absorption costing for the year will be $544 higher than net operating income under variable costing. 
C) The net operating income under absorption costing for the year will be $544 lower than net operating income under variable costing. 
D) The net operating income under absorption costing for the year will be $800 lower than net operating income under variable costing.

Question 15

Eagle Corporation manufactures a picnic table. Shown below is Eagle's cost structure:  In its first year of operations, Eagle produced and sold 10,000 tables. The tables sold for $120 each.
-How would Eagle's absorption costing net operating income have been affected in its first year if 12,000 tables were produced instead of 10,000 and Eagle still sold 10,000 tables?

Accepted Answer

A) net operating income would not have been affected 
B) net operating income would have been $27,000 higher 
C) net operating income would have been $31,500 higher 
D) net operating income would have been $116,000 lower 
A) net operating income would not have been affected 
B) net operating income would have been $27,000 higher 
C) net operating income would have been $31,500 higher 
D) net operating income would have been $116,000 lower

Question 16

The contribution margin is viewed as a better gauge of the long run profitability of a segment than the segment margin.

Accepted Answer

A) True 
 B)False

Question 17

Fixed manufacturing overhead is included in product costs under:

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 18

Assuming that a segment has both variable expenses and traceable fixed expenses,an increase in sales should increase profits by an amount equal to the sales times the segment margin ratio.

Accepted Answer

A) True 
 B)False

Question 19

Condit Corporation manufactures a variety of products. Variable costing net operating income was $75,600 last year and was $80,100 this year. Last year, inventory decreased by 3,400 units. This year, inventory increased by 3,000 units. Fixed manufacturing overhead cost is $5 per unit.
-What was the absorption costing net operating income this year?

Accepted Answer

A) $78,100 
B) $95,100 
C) $65,100 
D) $73,600 
A) $78,100 
B) $95,100 
C) $65,100 
D) $73,600

Question 20

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 net operating income for the company as a whole for June was:

Accepted Answer

A) $20,000 
B) $90,000 
C) $170,000 
D) $300,000 
A) $20,000 
B) $90,000 
C) $170,000 
D) $300,000

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

A common cost that should not be assigned to a particular product on a segmented income statement is:

Hubiak Corporation produces a single product and has the following cost structure: Required: Compute the unit product cost under absorption costing.Show your work!

Falquez Company sells three products: R, S, and T. Data for activity of Falquez Company during July are as follows: Common fixed expenses for July amounted to $90,000. -The contribution margin for Product R was:

Elbon 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 absorption costing?

Abe 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:

The contribution margin is viewed as a better gauge of the long run profitability of a segment than the segment margin.

Fixed manufacturing overhead is included in product costs under:

Assuming that a segment has both variable expenses and traceable fixed expenses,an increase in sales should increase profits by an amount equal to the sales times the segment margin ratio.

Managerial Accounting and Cost Concepts

Job-Order Costing

Process Costing

Cost-Volume-Profit Relationships

Activity-Based Costing: a Tool to Aid Decision Making

Profit Planning

Flexible Budgets and Performance Analysis

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Statement of Cash Flows

Financial Statement Analysis

Least-Squares Regression Computations

Appendix B: Cost of Quality

The Predetermined Overhead Rate and Capacity

Further Classification of Labor Costs

Fifo Method

Service Department Allocations

Abc Action Analysis

Using a Modified Form of Activity-Based Costing to Determine Product Costs for External Reports

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variances

Transfer Pricing

Service Department Charges

The Concept of Present Value

Income Taxes in Capital Budgeting Decisions

The Direct Method of Determining the Net Cash Provided by Operating Activities

Pricing Products and Services

Profitability Analysis

Filters

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

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

A common cost that should not be assigned to a particular product on a segmented income statement is:

Hubiak Corporation produces a single product and has the following cost structure: Required: Compute the unit product cost under absorption costing.Show your work!

Falquez Company sells three products: R, S, and T. Data for activity of Falquez Company during July are as follows: Common fixed expenses for July amounted to $90,000. -The contribution margin for Product R was:

Elbon 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 absorption costing?

Abe 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:

The contribution margin is viewed as a better gauge of the long run profitability of a segment than the segment margin.

Fixed manufacturing overhead is included in product costs under:

Assuming that a segment has both variable expenses and traceable fixed expenses,an increase in sales should increase profits by an amount equal to the sales times the segment margin ratio.

Managerial Accounting and Cost Concepts

Job-Order Costing

Process Costing

Cost-Volume-Profit Relationships

Activity-Based Costing: a Tool to Aid Decision Making

Profit Planning

Flexible Budgets and Performance Analysis

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Statement of Cash Flows

Financial Statement Analysis

Least-Squares Regression Computations

Appendix B: Cost of Quality

The Predetermined Overhead Rate and Capacity

Further Classification of Labor Costs

Fifo Method

Service Department Allocations

Abc Action Analysis

Using a Modified Form of Activity-Based Costing to Determine Product Costs for External Reports

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variances

Transfer Pricing

Service Department Charges

The Concept of Present Value

Income Taxes in Capital Budgeting Decisions

The Direct Method of Determining the Net Cash Provided by Operating Activities

Pricing Products and Services

Profitability Analysis

Filters