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

Walkenhorst Corporation has two divisions: Bulb Division and Seed 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 Bulb Division's break-even in sales dollars? b. What is the Seed Division's break-even in sales dollars? c. What is the company's overall break-even in sales dollars?

Common fixed costs should not be charged to the individual segments when preparing a segmented income statement.

What is the total period cost for the month under the absorption costing?

What would Cutterski report as its cost of goods sold under absorption costing?

Under absorption costing, for May the company would report a:

Under absorption costing, it is possible to defer a portion of the fixed manufacturing overhead costs of the current period to future periods through the inventory account.

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

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

The value of the company's inventory on May 31 under absorption costing would be:

If sales in Store B increase by $30,000 as a result of a $5,000 increase in traceable fixed expenses:

What is the unit product cost for the month under variable costing?

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

What is the unit product cost for the month under variable costing?

The carrying value on the balance sheet of the ending finished goods inventory under variable costing would be:

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

Under absorption costing, the unit product cost would be:

Hogans Corporation has two divisions: Delta and Echo. Data from the most recent month appear below: The company's common fixed expenses total $64,090. The break-even in sales dollars for Echo Division is closest to:

A properly constructed segmented income statement in a contribution format would show that the net operating income of the company as a whole is:

Nelson 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. Required: a. Prepare a contribution format income statement for the month using variable costing. b. Prepare an income statement for the month using absorption costing.

Carolfi Corporation has two divisions: Division A and Division B. Data from the most recent month appear below: The break-even in sales dollars for Division A is closest to: