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Exam 5: Variable Costing and Segment Reporting: Tools for Management

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Question 21

Multiple Choice

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Deboer Company, 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 approach?

A) $8,400
B) $17,600
C) $26,000
D) $13,600

E) B) and C)
F) All of the above

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Question 22

Multiple Choice

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Green Enterprises produces a single product. The following data were provided by the company for the most recent period: -For the period above,one would expect the net operating income under absorption costing to be:

A) higher than the net operating income under variable costing.
B) lower than the net operating income under variable costing.
C) the same as the net operating income under variable costing.
D) The relation between absorption costing net operating income and variable costing net operating income cannot be determined.

E) B) and D)
F) A) and D)

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Question 23

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The Rial Company's income statement for June is given below: -If sales for Division F increase $40,000 with a $10,000 increase in the Division's traceable fixed costs,the overall company net operating income should:

Under variable costing,all variable costs are treated as product costs.

Kilihea Corporation produces a single product. The company's absorption costing income statement for July follows: The company's variable production costs are $20 per unit and its fixed manufacturing overhead totals $80,000 per month. -Net operating income under the variable costing method for July would be:

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: What is the net operating income for the month under absorption costing?

Condit Corporation manufactures a variety of products. Variable costing net operating income was $75,600 last year and was $80,100 this year. Last year, inventory decreased by 3,400 units. This year, inventory increased by 3,000 units. Fixed manufacturing overhead cost is $5 per unit. -What was the absorption costing net operating income last year?

The salary of the treasurer of a corporation is an example of a common cost which normally cannot be traced to product segments.

Ingerson Company, which has only one product, has provided the following data concerning its most recent month of operations: -What is the unit product cost for the month under variable costing?

Stryker Corporation has two major business segments-East and West. In April, the East business segment had sales revenues of $500,000, variable expenses of $280,000, and traceable fixed expenses of $80,000. During the same month, the West business segment had sales revenues of $970,000, variable expenses of $514,000, and traceable fixed expenses of $184,000. The common fixed expenses totaled $280,000 and were allocated as follows: $112,000 to the East business segment and $168,000 to the West business segment. -The contribution margin of the West business segment is:

The unit product cost under absorption costing does not include fixed manufacturing overhead cost.

The following cost formula relates to last year's operations at Lemine Manufacturing Corporation: Y = $84,000 + $60.00X In the formula above, 75% of the fixed cost and 90% of the variable cost are manufacturing costs. Y is the total cost and X is the number of units produced and sold. -If Lemine produces and sells 7,000 units,what is the unit product cost under each of the following methods?

Clements Company, 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 the variable costing approach is:

Favini Company, which has only one product, has provided the following data concerning its most recent month of operations: -What is the unit product cost for the month under absorption costing?

Under variable costing,costs that are treated as period costs include:

Tsuchiya Corporation manufactures a variety of products.Last year,the company's variable costing net operating income was $57,500.Fixed manufacturing overhead costs deferred in inventory under absorption costing amounted to $35,400.What was the absorption costing net operating income last year?

Pong Incorporated's income statement for the most recent month is given below. -The marketing department believes that a promotional campaign for Store H costing $8,000 will increase the store's sales by $15,000.If the campaign is adopted,overall company net operating income should:

Vanstee Corporation manufactures a variety of products. Variable costing net operating income last year was $60,000 and this year was $67,000. Last year, $37,000 in fixed manufacturing overhead costs were deferred in inventory under absorption costing. This year, $8,000 in fixed manufacturing overhead costs were released from inventory under absorption costing. -What was the absorption costing net operating income this year?

Carr Company produces a single product. During the past year, Carr manufactured 25,000 units and sold 20,000 units. Production costs for the year were as follows: -Under absorption costing,the ending inventory for the year would be valued at:

Mennig Corporation produces a single product and has the following cost structure: -The unit product cost under variable costing is: