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Exam 4: Variable Costing and Segment Reporting: Tools for Management

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Question 61

Multiple Choice

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Tustin 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:

A) $420,000
B) $480,000
C) $139,000
D) $159,000

E) A) and D)
F) A) and C)

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Question 62

Multiple Choice

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

A) direct material cost
B) property taxes on the factory building
C) sales manager's salary
D) sales commissions

E) C) and D)
F) A) and D)

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Question 63

Multiple Choice

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Elbrege Corporation manufactures a single product. The company has supplied the following data: There was no beginning inventory. During the year 25,000 units were produced and 20,000 units were sold. Under absorption costing, the unit product cost would be:

Masley Corporation has provided the following data for its two most recent years of operation: In Year 1, 10,000 units were produced and in Year 2, 7,000 units were produced. Required: a. Assume the company uses absorption costing. Compute the unit product cost in each year. b. Assume the company uses variable costing. Compute the unit product cost in each year.

Norenberg Corporation manufactures a single product. The following data pertain to the company's operations over the last two years: What was the absorption costing net operating income last year?

Hayworth Corporation has just segmented last year's income statement into its ten product lines. The chief executive officer (CEO) is curious as to what effect dropping one of the product lines at the beginning of last year would have had on overall company profit. What is the best number for the CEO to look at to determine the effect of this elimination on the net operating income of the company as a whole?

Waltzer Corporation has provided the following data for its two most recent years of operation: Required: a. Assume the company uses absorption costing. Compute the unit product cost in each year. b. Assume the company uses absorption costing. Prepare an income statement for each year. c. Assume the company uses variable costing. Compute the unit product cost in each year. d. Assume the company uses variable costing. Prepare an income statement for each year. e. Prepare a report in good form reconciling the variable costing and absorption costing net incomes.

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?

All other things the same, if a division's traceable fixed expenses decrease then the division's segment margin will decrease.

Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations: The total contribution margin for the month under variable costing is:

Tat Corporation produces a single product and has the following cost structure: The unit product cost under absorption costing is:

Else Corporation has provided the following data for its two most recent years of operation: Required: a. Assume the company uses absorption costing. Compute the unit product cost in each year. b. Assume the company uses variable costing. Compute the unit product cost in each year.

Borunda Corporation has provided the following data for its two most recent years of operation: Required: a. Assume the company uses absorption costing. Prepare an income statement for each year. b. Assume the company uses variable costing. Prepare an income statement for each year. c. Prepare a report in good form reconciling the variable costing and absorption costing net incomes.

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

A company produces a single product. Variable production costs are $21 per unit and variable selling and administrative expenses are $4 per unit. Fixed manufacturing overhead totals $30,000 and fixed selling and administration expenses total $36,000. Assuming a beginning inventory of zero, production of 6,000 units and sales of 5,600 units, the dollar value of the ending inventory under variable costing would be:

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

Mandato 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:

Bryans Corporation has provided the following data for its two most recent years of operation: The unit product cost under absorption costing in Year 2 is closest to:

Davison 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 the absorption costing?

Worrel 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 last year. Show your work! b. Determine the absorption costing net operating income this year. Show your work!