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

DeAnne Company produces a single product. The company's variable costing income statement for August appears below: The company produced 35,000 units in August and the beginning inventory consisted of 8,000 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 August 31 under the absorption costing method is:

All other things being equal,if a division's traceable fixed expenses increase:

Routsong Company had the following sales and production data for the past four years: Selling price per unit,variable cost per unit,and total fixed cost are the same in each year.Which of the following statements is not correct?

Enz Corporation manufactures a variety of products. The following data pertain to the company's operations over the last two years: -What was the absorption costing net operating income last year?

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

In an income statement segmented by product line,a fixed expense that cannot be allocated among product lines on a cause-and-effect basis should be:

A portion of the total fixed manufacturing overhead cost incurred during a period may:

Roberts Company produces a single product.This year,the company's net operating income under absorption costing was $2,000 lower than under variable costing.The company sold 8,000 units during the year,and its variable costs were $8 per unit,of which $2 was variable selling and administrative expense.If production cost was $10 per unit under absorption costing,then how many units did the company produce during the year? (The company produced the same number of units last year. )

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

Gordy Corporation manufactures a variety of products.Last year,variable costing net operating income was $81,000.The fixed manufacturing overhead costs released from inventory under absorption costing amounted to $39,000. Required: Determine the absorption costing net operating income last year.Show your work!

In responsibility accounting,each segment in an organization should be charged with the costs for which it is responsible and over which it has control plus its share of common organizational costs.

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. -Net operating income for the company was:

UHF Antennas,Inc. ,produces and sells a unique television antenna.The company has just opened a new plant to manufacture the antenna,and the following cost and revenue data have been reported for the first month of the new plant's operation: Management is anxious to see how profitable the new antenna will be and has asked that an income statement be prepared for the month.Assume that direct labor is a variable cost. Required: a.Assuming that the company uses absorption costing,compute the unit product cost and prepare an income statement. b.Assuming that the company uses variable costing,compute the unit product cost and prepare an income statement. c.Explain the reason for any difference in the ending inventories under the two costing methods and the impact of this difference on reported net operating income.

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 product line segment margin for Product A for June was:

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 net operating income of the company as a whole is:

If the number of units produced exceeds the number of units sold,then net operating income under absorption costing will:

Under absorption costing,the cost of goods sold for the year would be:

Whitney, Inc., produces a single product. The following data pertain to one month's operations: -The carrying value on the balance sheet of the ending finished goods inventory under absorption costing would be:

A company produces a single product.Last year,fixed manufacturing overhead was $30,000,variable production costs were $48,000,fixed selling and administration costs were $20,000,and variable selling administrative expenses were $9,600.There was no beginning inventory.During the year,3,000 units were produced and 2,400 units were sold at a price of $40 per unit.Under variable costing,net operating income would be:

Cuffee 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!