Question 1

The total contribution margin for the month under variable costing is:

Accepted Answer

A) $237,900 
B) $97,100 
C) $152,500 
D) $286,700

Question 2

Corporation Z has two divisions: A & B. The contribution margin for Division A is $188,600 and for Division B it is $196,500. Fixed expenses for Corporation Z are as follows:
  Required:
Prepare a segmented income statement for this company that shows the divisional segment margins and the company's net operating income.

Accepted Answer

The answer of Corporation Z has two divisions: A &...

Question 3

Denner Corporation has two divisions, A and B. The following data pertain to operations in October:  If common fixed expenses were $31,000, total fixed expenses were:

Accepted Answer

A) $31,000 
B) $62,000 
C) $93,000 
D) $52,000
 Division A:
Variable expenses = Variable expense ratio × Sales
= 0)70 × $90,000 = $63,000
Division B:
Variable expenses = Variable expense ratio × Sales
= 0)60 × $150,000 = $90,000
 Division A:
Segment margin = Contribution margin - Traceable fixed expenses
$2,000 = $27,000 - Traceable fixed expenses
Traceable fixed expenses = $27,000 - $2,000 = $25,000
Division B:
Segment margin = Contribution margin - Traceable fixed expenses
$23,000 = $60,000 - Traceable fixed expenses
Traceable fixed expenses = $60,000 - $23,000 = $37,000
 Total fixed expenses = Traceable fixed expenses + Common fixed expenses
= $62,000 + $31,000 = $93,000

Question 4

When viewed over the long term, cumulative net operating income will be the same for variable and absorption costing if ending inventories exceed beginning inventories.

Accepted Answer

A) True 
 B)False

Question 5

The unit product cost under absorption costing is:

Accepted Answer

A) $231 per unit 
B) $103 per unit 
C) $133 per unit 
D) $102 per unit

Question 6

Mitchel Corporation manufactures a single product. Last year, variable costing net operating income was $55,000. The fixed manufacturing overhead costs released from inventory under absorption costing amounted to $24,000.
Required:
Determine the absorption costing net operating income last year. Show your work!

Accepted Answer

The answer of Mitchel Corporation manufactures a single product. Last...

Question 7

If the Northern Division's sales last year were $300,000 higher, how would this have changed Nantua's net operating income? (Assume no change in selling prices, variable expenses per unit, or fixed expenses.)

Accepted Answer

A) $30,000 increase 
B) $80,000 increase 
C) $120,000 increase 
D) $300,000 increase

Question 8

Under variable costing, fixed manufacturing overhead is:

Accepted Answer

A) carried in a liability account. 
B) carried in an asset account. 
C) ignored. 
D) expensed as a period cost.

Question 9

Oakes Corporation, which has only one product, has provided the following data concerning its most recent month of operations:  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.

Accepted Answer

The answer of Oakes Corporation, which has only one product,...

Question 10

What was the absorption costing net operating income this year?

Accepted Answer

A) $55,000 
B) $73,000 
C) $44,000 
D) $84,000

Question 11

The product line segment margin for Product A for June was:

Accepted Answer

A) $300,000 
B) $120,000 
C) $65,000 
D) $10,000

Question 12

The total sales for Meyer Corporation were:

Accepted Answer

A) $983,333 
B) $430,000 
C) $550,000 
D) $480,000

Question 13

When the number of units in work in process and finished goods inventories decrease, absorption costing net operating income will typically be greater than variable costing net operating income.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) $97 per unit 
B) $108 per unit 
C) $78 per unit 
D) $89 per unit

Question 15

What was the absorption costing net operating income this year?

Accepted Answer

A) $125,000 
B) $72,000 
C) $75,000 
D) $121,000

Question 16

Sturr Market has 3 stores: P, Q, and R. During October, Store P had a contribution margin of $24,000 and a contribution margin ratio of 30%. Store Q had variable expenses of $48,000 and a contribution margin ratio of 40%. Store R had variable expenses of $84,000 and a variable expense ratio of 70% of sales. Sturr Market's total sales were:

Accepted Answer

A) $320,000 
B) $360,000 
C) $440,000 
D) $280,000

Question 17

The total fixed expenses for Meyer Corporation were:

Accepted Answer

A) $45,000 
B) $33,000 
C) $85,000 
D) $78,000

Question 18

Martz Corporation manufactures a single product. The following data pertain to the company's operations over the last two years:  Required:
a. Determine the absorption costing net operating income for last year. Show your work!
b. Determine the absorption costing net operating income for this year. Show your work!

Accepted Answer

The answer of Martz Corporation manufactures a single product. The...

Question 19

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

Accepted Answer

A) $121,759 
B) $322,457 
C) $246,550 
D) $368,309

Question 20

Channing Corporation has two divisions, C and D. The overall company contribution margin ratio is 30%, with sales in the two divisions totaling $750,000. If variable expenses are $450,000 in Division C and if Division C's contribution margin ratio is 25%, then sales in Division D must be:

Accepted Answer

A) $75,000 
B) $225,000 
C) $150,000 
D) $300,000

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

The total contribution margin for the month under variable costing is:

Denner Corporation has two divisions, A and B. The following data pertain to operations in October: If common fixed expenses were $31,000, total fixed expenses were:

When viewed over the long term, cumulative net operating income will be the same for variable and absorption costing if ending inventories exceed beginning inventories.

The unit product cost under absorption costing is:

If the Northern Division's sales last year were $300,000 higher, how would this have changed Nantua's net operating income? (Assume no change in selling prices, variable expenses per unit, or fixed expenses.)

Under variable costing, fixed manufacturing overhead is:

Oakes Corporation, which has only one product, has provided the following data concerning its most recent month of operations: 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.

What was the absorption costing net operating income this year?

The product line segment margin for Product A for June was:

The total sales for Meyer Corporation were:

When the number of units in work in process and finished goods inventories decrease, absorption costing net operating income will typically be greater than variable costing net operating income.

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

What was the absorption costing net operating income this year?

The total fixed expenses for Meyer Corporation were:

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

Channing Corporation has two divisions, C and D. The overall company contribution margin ratio is 30%, with sales in the two divisions totaling $750,000. If variable expenses are $450,000 in Division C and if Division C's contribution margin ratio is 25%, then sales in Division D must be: