The following information pertains to Stark Corporation: $\begin{array}{lr} \text { Beginning inventory } & 0 \text { units } \\ \text { Ending inventory } & 5,000 \text { units } \\ \text { Direct labour per unit } & \$ 20 \\ \text { Direct materials per unit } & 16 \\ \text { Variable overhead per unit } & 4 \\ \text { Fixed overhead per unit } & 10 \\ \text { Variable selling costs per unit } & 12 \\ \text { Fixed selling costs per unit } & 16 \end{array}$ -Refer to the figure.What is the value of ending inventory using the absorption costing method?

A) $200,000 B) $250,000 C) $310,000 D) $390,000 A) $200,000 B) $250,000 C) $310,000 D) $390,000

Eastwood Company has the following information for the current year: $\begin{array}{llr} \text { Selling price } & \$ 150 \text { per unit }\\ \text { Variable production costs} & \text { \( \$ 40 $ per unit produced}\\ \text { Variable selling and admin. expenses} & \text { $ \$ 16 $ per unit sold }\\ \text { Fixed production costs} & \text { $ \$ 200,000 $ }\\ \text {Fixed selling and admin. expenses } & \text { $ \$ 140,000 $ }\\ \text {Units produced } & \text { 10,000 units }\\ \text {Units sold } & \text { 8.000 units } \end{array}\) There were no beginning inventories. What is the net income for Eastwood using the absorption costing method?

A) $452,000 B) $480,000 C) $600,000 D) $1,200,000 A) $452,000 B) $480,000 C) $600,000 D) $1,200,000

Barmore Company has the following information pertaining to its two divisions for the current year: $\begin{array}{lrr} &\text { Division } A&\text { Division } B\\ \text { Variable selling and admin. expenses } & \$ 35,000 & \$ 45,000 \\ \text { Direct fixed manufacturing expenses } & 17,500 & 50,000 \\ \text { Sales } & 100,000 & 200,000 \\ \text { Direct fixed selling and admin. expenses } & 15,000 & 35,000 \\ \text { Variable manufacturing expenses } & 20,000 & 50,000 \end{array}$ Common expenses are $12,000 for the current year. -Refer to the figure.What is the segment margin for Division B?

A) $20,000 B) $55,000 C) $105,000 D) $155,000 A) $20,000 B) $55,000 C) $105,000 D) $155,000

Nauman Company has the following information pertaining to its two divisions for the current year: $\begin{array}{lrr} &\text { Division } X&\text { Division } Y\\ \text { Variable selling and admin. expenses } & \$ 70,000 & \$ 90,000 \\ \text { Direct fixed manufacturing expenses } & 35,000 & 100,000 \\ \text { Sales } & 200,000 & 400,000 \\ \text { Direct fixed selling and admin. expenses } & 30,000 & 70,000 \\ \text { Variable manufacturing expenses } & 40,000 & 100,000 \end{array}$ Common expenses are $24,000 for the current year. - What is the segment margin for Division Y?

A) $40,000 B) $210,000 C) $240,000 D) $310,000 A) $40,000 B) $210,000 C) $240,000 D) $310,000

Steele Corporation has the following information for January,February,and March: $\begin{array}{lccc} & \text { January } & \text { February } &\text { March }\\ \text { Units produced } & 10,000 & 10,000&10,000 \\ \text { Units sold } & 7,000 & 8,500 &10,500\\ \end{array}$ $\begin{array}{lr} \text { Production costs per unit (based on 10,000 units) are as follows: }\\ \text { Direct materials } & \$ 12 \\ \text { Direct labour } & 8 \\ \text { Variable factory overhead } & 6 \\ \text { Fixed factory overhead } & 4 \\ \text { Variable selling and admin. expenses } & 10\\ \text { Fixed selling and admin. expenses }&4 \end{array}$ There were no beginning inventories for January,and all units were sold for $50.Costs are stable over the three months. What is the February ending inventory for Steele Corporation using the absorption costing method?

A) $39,000 B) $45,000 C) $135,000 D) $300,000 A) $39,000 B) $45,000 C) $135,000 D) $300,000

The following information pertains to Stark Corporation: $\begin{array}{lr} \text { Beginning inventory} &0 \text { units }\\ \text { Ending inventory} &5,000 \text { units }\\ \text { Direct labour per unit } &\$20\\ \text { Direct materials per unit} &16\\ \text {Variable overhead per unit } &4\\ \text {Fixed overhead per unit } &10\\ \text { Variable selling costs per unit } &12\\ \text {Fixed selling costs per unit } &16\\ \end{array}$ What is the value of ending inventory using the variable costing method?

A) $200,000 B) $250,000 C) $310,000 D) $390,000 A) $200,000 B) $250,000 C) $310,000 D) $390,000

Gage Company had the following information: \[\begin{array} { l r } \text { Revenues }& \$ 600,000 \\ \text { Cost of goods sold } & 60 \% \\ \text { Selling and adrinistrative expenses } & \$ 130,000 \end{array}\] What is the markup on cost of goods sold?

A) 0.1833 B) 0.3611 C) 0.6667 D) 0.7667 A) 0.1833 B) 0.3611 C) 0.6667 D) 0.7667

Ramon Company reported the following units of production and sales for June and July the current year: $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\text { Units }$ $\begin{array}{lrr} \underline{\text {Month}}& \underline{\text {Producer}}& \underline{\text {Sold}}\\ \text { June } & 100,000 & 90,000 \\ \text { July } & 100,000 & 105,000 \end{array}$ Net income under absorption costing for June was $40,000; net income under variable costing for July was $50,000.Fixed manufacturing costs were $600,000 for each month. How much was net income for July using absorption costing?

A) $20,000 B) $40,000 C) $50,000 D) $80,000 A) $20,000 B) $40,000 C) $50,000 D) $80,000

Exam 12: Pricing and Profitability Analysis

The following information pertains to Stark Corporation: Beginning inventory 0 units Ending inventory 5,000 units Direct labour per unit \ 20 Direct materials per unit 16 Variable overhead per unit 4 Fixed overhead per unit 10 Variable selling costs per unit 12 Fixed selling costs per unit 16 -Refer to the figure.What is the value of ending inventory using the absorption costing method?

(Multiple Choice)

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Question 41

Which of the following markets is characterized by the following: only a few firms in the industry,a fairly unique product,difficult entry into the industry,and spending for differentiation of the product?

(Multiple Choice)

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Question 42

Franklin Company's expected sales were 2,000 units at $100 per unit.During the current year,it had actual sales of 1,800 units at $110 per unit.Budgeted variable costs were $60 per unit. What is Franklin's total sales variance?

(Multiple Choice)

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Question 43

Eastwood Company has the following information for the current year: Selling price \ 150 per unit Variable production costs \ 40 per unit produced Variable selling and admin. expenses \ 16 per unit sold Fixed production costs \ 200,000 Fixed selling and admin. expenses \ 140,000 Units produced 10,000 units Units sold 8.000 units There were no beginning inventories. What is the net income for Eastwood using the absorption costing method?

(Multiple Choice)

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Question 44

Barmore Company has the following information pertaining to its two divisions for the current year: Division A Division B Variable selling and admin. expenses \ 35,000 \ 45,000 Direct fixed manufacturing expenses 17,500 50,000 Sales 100,000 200,000 Direct fixed selling and admin. expenses 15,000 35,000 Variable manufacturing expenses 20,000 50,000 Common expenses are $12,000 for the current year. -Refer to the figure.What is the segment margin for Division B?

(Multiple Choice)

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Question 45

Consider the following portion of a segmented income statement for the year just ended.Assume that the fixed expenses of Division X include $30,000 of direct expenses and that the discontinuance of the department will not affect the sales of the other departments nor reduce the common expenses. $\begin{array}{lr}&\text { Division } X\\\text { Sales } & \$ 100,000 \\\text { Variable manufacturing costs } & \$ 60,000 \\\text { Gross profit } & \$ 40,000\\\text {Fixed expenses (direct and allocated) }&50,000\\\text {Operating income (loss)}&\$(10,000)\end{array}$ What would be the effect on the firm's operating income if Division X were discontinued?

(Multiple Choice)

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Question 46

Nauman Company has the following information pertaining to its two divisions for the current year: Division X Division Y Variable selling and admin. expenses \ 70,000 \ 90,000 Direct fixed manufacturing expenses 35,000 100,000 Sales 200,000 400,000 Direct fixed selling and admin. expenses 30,000 70,000 Variable manufacturing expenses 40,000 100,000 Common expenses are $24,000 for the current year. - What is the segment margin for Division Y?

(Multiple Choice)

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Question 47

Refer to the figure.What is the markup based on materials?

(Multiple Choice)

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Question 48

What is a disadvantage of absorption costing?

(Multiple Choice)

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Question 49

What is the definition of target costing?

(Multiple Choice)

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Question 50

Steele Corporation has the following information for January,February,and March: January February March Units produced 10,000 10,000 10,000 Units sold 7,000 8,500 10,500 Production costs per unit (based on 10,000 units) are as follows: Direct materials \ 12 Direct labour 8 Variable factory overhead 6 Fixed factory overhead 4 Variable selling and admin. expenses 10 Fixed selling and admin. expenses 4 There were no beginning inventories for January,and all units were sold for $50.Costs are stable over the three months. What is the February ending inventory for Steele Corporation using the absorption costing method?

(Multiple Choice)

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Question 51

What is the definition of oligolopoly?

(Multiple Choice)

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Question 52

Why is determining the profit of a segment harder than the company as a whole?

(Multiple Choice)

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Question 53

When monthly production volume is constant and sales volume is less than production,how will net income determined with variable costing procedures compare to net income determined with absorption costing?

(Multiple Choice)

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Question 54

The following information pertains to Stark Corporation: Beginning inventory 0 units Ending inventory 5,000 units Direct labour per unit \2 0 Direct materials per unit 16 Variable overhead per unit 4 Fixed overhead per unit 10 Variable selling costs per unit 12 Fixed selling costs per unit 16 What is the value of ending inventory using the variable costing method?

(Multiple Choice)

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Question 55

Franklin Company's expected sales were 2,000 units at $100 per unit.During the current year,it had actual sales of 1,800 units at $110 per unit.Budgeted variable costs were $60 per unit. What is Franklin's sales price variance?

(Multiple Choice)

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Question 56

What are the total allocated fixed costs for the current year?

(Multiple Choice)

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Question 57

Gage Company had the following information: Revenues \ 600,000 Cost of goods sold 60\% Selling and adrinistrative expenses \ 130,000 What is the markup on cost of goods sold?

(Multiple Choice)

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(70)

Question 58

Ramon Company reported the following units of production and sales for June and July the current year: $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { Units }$ June 100,000 90,000 July 100,000 105,000 Net income under absorption costing for June was $40,000; net income under variable costing for July was $50,000.Fixed manufacturing costs were $600,000 for each month. How much was net income for July using absorption costing?

(Multiple Choice)

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Question 59

What is the term for charging different prices to different customers for essentially the same product?

(Multiple Choice)

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Question 60

Which of the following markets is characterized by the following: only a few firms in the industry,a fairly unique product,difficult entry into the industry,and spending for differentiation of the product?

Franklin Company's expected sales were 2,000 units at $100 per unit.During the current year,it had actual sales of 1,800 units at $110 per unit.Budgeted variable costs were $60 per unit. What is Franklin's total sales variance?

Refer to the figure.What is the markup based on materials?

What is a disadvantage of absorption costing?

What is the definition of target costing?

What is the definition of oligolopoly?

Why is determining the profit of a segment harder than the company as a whole?

When monthly production volume is constant and sales volume is less than production,how will net income determined with variable costing procedures compare to net income determined with absorption costing?

Franklin Company's expected sales were 2,000 units at $100 per unit.During the current year,it had actual sales of 1,800 units at $110 per unit.Budgeted variable costs were $60 per unit. What is Franklin's sales price variance?

What are the total allocated fixed costs for the current year?

Gage Company had the following information: Revenues \ 600,000 Cost of goods sold 60\% Selling and adrinistrative expenses \ 130,000 What is the markup on cost of goods sold?

What is the term for charging different prices to different customers for essentially the same product?

A: Basic Cost Management Concepts

B: Basic Cost Management Concepts

Cost Behaviour

Cost-Volume-Profit Analysis

Job-Order Costing Systems

Process Costing

Activity-Based Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Responsibility Accounting,performance Evaluation,and Transfer Pricing

Tactical Decision Making

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Inventory Management: Economic Order Quantity,jit,and the Theory of Constraints

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