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Exam 6: Variable Costing and Segment Reporting: Tools for Management

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Question 91

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The Southern Corporation manufactures a single product and has the following cost structure: Last year, 7,490 units were produced and 7,190 units were sold. There was no beginning inventory.The carrying value on the balance sheet of the ending inventory of finished goods under variable costing would be:

A) the same as absorption costing.
B) $7,190 greater than under absorption costing.
C) $7,190 less than under absorption costing.
D) $5,700 less than under absorption costing.

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Question 92

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Sipho Corporation manufactures a single product. Last year, the company's variable costing net operating income was $90,900. Fixed manufacturing overhead costs released from inventory under absorption costing amounted to $21,900. What was the absorption costing net operating income last year?

A) $69,000
B) $90,900
C) $21,900
D) $112,800

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Question 93

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Koff Corporation has two divisions: Garden Division and Farm Division. The following report is for the most recent operating period: Required:a. What is the Garden Division's break-even in sales dollars?b. What is the Farm Division's break-even in sales dollars?c. What is the company's overall break-even in sales dollars?d. What would be the company's overall net operating income if the company operated at its two division's break-even points?

Last year, Kirsten Corporation's variable costing net operating income was $63,400. Fixed manufacturing overhead costs released from inventory under absorption costing amounted to $10,700. What was the absorption costing net operating income last year?

Dattilio Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 54,000 units and sold 49,000 units. The company's only product is sold for $238 per unit. Required:a. Assume the company uses super-variable costing. Compute the unit product cost for the year. b. Assume the company uses super-variable costing. Prepare an income statement for the year.

Mccrone Corporation has provided the following data for its two most recent years of operation: The net operating income (loss) under variable costing in Year 1 is closest to:

The Dorset Corporation produces and sells a single product. The following data refer to the year just completed: Assume that direct labor is a variable cost.Required:a. Compute the unit product cost under both the absorption costing and variable costing approaches.b. Prepare an income statement for the year using absorption costing.c. Prepare an income statement for the year using variable costing.d. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above.

Stubenrauch Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 38,000 units and sold 32,000 units. The company's only product is sold for $240 per unit.The net operating income for the year under super-variable costing is:

Nantor Corporation has two divisions, Southern and Northern. The following information was taken from last year's income statement segmented by division: Net operating income last year for Nantor Corporation was $800,000.In last year's income statement segmented by division, what were Nantor's total common fixed expenses?

Plummer Corporation has provided the following data for its two most recent years of operation: The net operating income (loss) under variable costing in Year 2 is closest to:

Homeyer Corporation has provided the following data for its two most recent years of operation: The net operating income (loss) under absorption costing in Year 1 is closest to:

Data for January for Bondi Corporation and its two major business segments, North and South, appear below: In addition, common fixed expenses totaled $179,000 and were allocated as follows: $93,000 to the North business segment and $86,000 to the South business segment.A properly constructed segmented income statement in a contribution format would show that the segment margin of the North business segment is:

Krepps Corporation produces a single product. Last year, Krepps manufactured 30,420 units and sold 24,900 units. Production costs for the year were as follows: Sales totaled $1,207,650 for the year, variable selling and administrative expenses totaled $136,950, and fixed selling and administrative expenses totaled $185,562. There was no beginning inventory. Assume that direct labor is a variable cost.Under absorption costing, the ending inventory for the year would be valued at:

Stubenrauch Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 38,000 units and sold 32,000 units. The company's only product is sold for $240 per unit.Assume that the company uses a variable costing system that assigns $14 of direct labor cost to each unit that is produced. The net operating income under this costing system is:

Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations: What is the total period cost for the month under variable costing?

Cahalane Corporation has provided the following data for its two most recent years of operation: Which of the following statements is true for Year 2

Labadie Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 25,000 units and sold 22,000 units. The company's only product is sold for $251 per unit.The unit product cost under super-variable costing is:

Vancott Incorporated, 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:Compute the unit product cost under absorption costing. Show your work!

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 variable costing?

Caruso Incorporated, which produces a single product, has provided the following data for its most recent month of operations: There were no beginning or ending inventories.The unit product cost under absorption costing was: