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Exam 7: Variable Costing and Segment Reporting: Tools for Management

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Question 1

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The unit product cost under absorption costing in Year 2 is closest to:

A) $33.00
B) $9.00
C) $24.00
D) $37.00

E) A) and B)
F) A) and C)

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Question 2

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Gulinson 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:

A) $134,694
B) $184,531
C) $487,179
D) $267,367

E) C) and D)
F) B) and C)

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Question 3

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

Fowler Corporation manufactures a single product.Operating data for the company and its absorption costing income statements for the last two years are presented below: Variable manufacturing costs are $6 per unit.Fixed manufacturing overhead totals $72,000 in each year.This fixed manufacturing overhead is applied at the rate of $4 per unit.Variable selling and administrative expenses are $2 per unit sold. Required: a.Compute the unit product cost in each year under variable costing. b.Prepare new income statements for each year using variable costing. c.Reconcile the absorption costing and variable costing net operating income for each year.

What was the absorption costing net operating income last year?

The net operating income (loss) under absorption costing is closest to:

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

A cost that would be included in product costs under both absorption costing and variable costing is:

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

The Consumer Division's break-even sales is closest to:

Truo Corporation produces a single product.Last year, the company had net operating income of $100,000 using variable costing.Beginning and ending inventories were 13,000 units and 18,000 units, respectively.If the fixed manufacturing overhead cost was $4 per unit both last year and this year, what would have been the net operating income using absorption costing?

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

Under absorption costing, the unit product cost is:

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.

Allocating common fixed costs to segments on segmented income statements increases the usefulness of such statements.

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

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

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

Nelter 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.