Exam 11: Variable Costing and Segment Reporting: Tools for Management

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:

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

If Carlos' absorption costing net operating income for this first year is $118,125, what would its variable costing net operating income be for this first year?

Sproull 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!

A common fixed cost is a fixed cost that is incurred because of the existence of a particular business segment and that would be eliminated if the segment were eliminated.

Sechrest Corporation manufactures a single product. Last year, the company's variable costing net operating income was $80,500. Fixed manufacturing overhead costs released from inventory under absorption costing amounted to $18,400. What was the absorption costing net operating income last year?

What is the net operating income for the month under absorption costing?

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

Peals Corporation has two divisions: Home Division and Commercial Division. The following report is for the most recent operating period: The company's common fixed expenses total $125,280. 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?

Yuvil Corporation produces a single product. At the end of the company's first year of operations, 1,000 units of inventory remained on hand. Its variable manufacturing overhead cost is $45 per unit and its fixed manufacturing overhead cost is $10 per unit. Yuvil's absorption costing net operating income would be higher than its variable costing net operating income by:

Which of the following costs at a manufacturing company would be treated as a product cost under both absorption costing and variable costing?

A properly constructed segmented income statement in a contribution format would show that the segment margin of the Consumer business segment is:

The unit product cost under variable costing is:

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

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?

Under variable costing, net operating income would be: