Question 1

The following data were provided by Rider, Inc, which produces a single product:   Under absorption costing, the unit product cost is:

Accepted Answer

A) $19 per unit 
B) $13 per unit 
C) $10 per unit 
D) $14 per unit 
A) $19 per unit 
B) $13 per unit 
C) $10 per unit 
D) $14 per unit

Question 2

Pevy Corporation has two divisions: Southern Division and Northern Division. The following data are for the most recent operating period:   The common fixed expenses have been allocated to the divisions on the basis of sales. What is the company's overall net operating income if it operates at the break-even points for its two divisions?

Accepted Answer

A) ($36,520) 
B) $33,080 
C) $0 
D) ($206,520) 
A) ($36,520) 
B) $33,080 
C) $0 
D) ($206,520)

Question 3

Gabbert 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?

Accepted Answer

A) $93,600 
B) $154,800 
C) $88,400 
D) $182,000 
A) $93,600 
B) $154,800 
C) $88,400 
D) $182,000

Question 4

Routsong Corporation had the following sales and production for the past four years:   Selling price per unit, variable cost per unit, and total fixed cost are the same each year. There were no beginning inventories in Year 1. Which of the following statements is NOT correct?

Accepted Answer

A) Under variable costing, net operating income for Year 1 and Year 2 would be the same. 
B) Because of the changes in production levels, under variable costing the unit product cost will change each year. 
C) The total net operating income for all four years combined would be the same under variable and absorption costing. 
D) Under absorption costing, net operating income in Year 4 would be less than the net operating income in Year 2. 
A) Under variable costing, net operating income for Year 1 and Year 2 would be the same. 
B) Because of the changes in production levels, under variable costing the unit product cost will change each year. 
C) The total net operating income for all four years combined would be the same under variable and absorption costing. 
D) Under absorption costing, net operating income in Year 4 would be less than the net operating income in Year 2.

Question 5

Data for March for Lazarus Corporation and its two major business segments, North and South, appear below:   In addition, common fixed expenses totaled $156,000 and were allocated as follows: $84,000 to the North business segment and $72,000 to the South business segment. A properly constructed segmented income statement in a contribution format would show that the net operating income of the company as a whole is:

Accepted Answer

A) -$109,000 
B) $203,000 
C) $293,000 
D) $47,000 
A) -$109,000 
B) $203,000 
C) $293,000 
D) $47,000

Question 6

Pen Corporation manufactures a single product. Last year, the company's variable costing net operating income was $55,700 and ending inventory increased by 800 units. Fixed manufacturing overhead cost per unit was $3 in both beginning and ending inventory.
Required:
Determine the absorption costing net operating income for last year. Show your work!

Accepted Answer

Manufacturing overhead deferred in (rele

Question 7

When the number of units in work in process and finished goods inventories decrease, absorption costing net operating income will typically be greater than variable costing net operating income.

Accepted Answer

A) True 
 B)False

Question 8

Direct materials is considered to be a product cost under variable costing but not absorption costing.

Accepted Answer

A) True 
 B)False

Question 9

Routit Corporation had the following sales and production for the past four years:   Selling price per unit, variable cost per unit, and total fixed cost are the same each year. There were no beginning inventories in Year 1. Which of the following statements is correct?

Accepted Answer

A) Under variable costing, net operating income for Year 3 and Year 4 would be the same. 
B) Under variable costing, net operating income for Year 2 and Year 3 would be the same. 
C) Variable costing net income would exceed absorption costing net income in Year 1. 
D) Absorption costing net income would exceed variable costing net income in Year 4. 
A) Under variable costing, net operating income for Year 3 and Year 4 would be the same. 
B) Under variable costing, net operating income for Year 2 and Year 3 would be the same. 
C) Variable costing net income would exceed absorption costing net income in Year 1. 
D) Absorption costing net income would exceed variable costing net income in Year 4.

Question 10

Gough Corporation has two divisions: Domestic and Foreign. Data from the most recent month appear below:   The break-even in sales dollars for the company as a whole is closest to:

Accepted Answer

A) $609,794 
B) $502,579 
C) $107,216 
D) $436,424 
A) $609,794 
B) $502,579 
C) $107,216 
D) $436,424

Question 11

Brummitt Corporation has two divisions: the BAJ Division and the CBB Division. The corporation's net operating income is $10,700. The BAJ Division's divisional segment margin is $76,100 and the CBB Division's divisional segment margin is $42,300. What is the amount of the common fixed expense not traceable to the individual divisions?

Accepted Answer

A) $86,800 
B) $107,700 
C) $53,000 
D) $118,400 
A) $86,800 
B) $107,700 
C) $53,000 
D) $118,400

Question 12

Chown Corporation, which has only one product, has provided the following data concerning its most recent month of operations:   The total gross margin for the month under the absorption costing approach is:

Accepted Answer

A) $196,800 
B) $179,400 
C) $390,000 
D) $7,800 
A) $196,800 
B) $179,400 
C) $390,000 
D) $7,800

Question 13

Qabar Corporation, which has only one product, has provided the following data concerning its most recent month of operations:   Required:
a. What is the unit product cost for the month under variable costing?
b. Prepare a contribution format income statement for the month using variable costing.
c. Without preparing an income statement, determine the absorption costing net operating income for the month. (Hint: Use the reconciliation method.)

Accepted Answer

a. Variable costing unit product cost @#IMG-DLM& b

Question 14

Bateman Corporation, 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?

Accepted Answer

A) $97 per unit 
B) $108 per unit 
C) $78 per unit 
D) $89 per unit 
A) $97 per unit 
B) $108 per unit 
C) $78 per unit 
D) $89 per unit

Question 15

Sosinski Corporation has two divisions: Domestic Division and Foreign Division. The following data are for the most recent operating period:   The common fixed expenses have been allocated to the divisions on the basis of sales. The company's overall break-even sales is closest to:

Accepted Answer

A) $126,874 
B) $466,116 
C) $339,241 
D) $320,490 
A) $126,874 
B) $466,116 
C) $339,241 
D) $320,490

Question 16

Last year, Rassel Corporation's variable costing net operating income was $63,200. Fixed manufacturing overhead costs deferred in inventory under absorption costing amounted to $31,900. What was the absorption costing net operating income last year?

Accepted Answer

A) $31,300 
B) $95,100 
C) $63,200 
D) $31,900 
A) $31,300 
B) $95,100 
C) $63,200 
D) $31,900

Question 17

Under variable costing, which of the following is not expensed in its entirety in the period in which it is incurred?

Accepted Answer

A) fixed manufacturing overhead cost 
B) fixed selling and administrative expense 
C) variable selling and administrative expense 
D) variable manufacturing overhead cost 
A) fixed manufacturing overhead cost 
B) fixed selling and administrative expense 
C) variable selling and administrative expense 
D) variable manufacturing overhead cost

Question 18

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:   The total contribution margin for the month under variable costing is:

Accepted Answer

A) $160,000 
B) $88,000 
C) $42,600 
D) $120,000 
A) $160,000 
B) $88,000 
C) $42,600 
D) $120,000

Question 19

Monce Corporation has two divisions: Home Division and Commercial Division. The following report is for the most recent operating period:   The common fixed expenses have been allocated to the divisions on the basis of sales.
Required:
a. What is the Home Division's break-even in sales dollars?
b. What is the Commercial Division's break-even in sales dollars?
c. What is the company's overall break-even in sales dollars?

Accepted Answer

@#IMG-DLM& a. Home Division break-even:
Segment CM

Question 20

Elliot 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 absorption costing?

Accepted Answer

A) ($19,600) 
B) $9,600 
C) $8,400 
D) $18,000 
A) ($19,600) 
B) $9,600 
C) $8,400 
D) $18,000

The following data were provided by Rider, Inc, which produces a single product: Under absorption costing, the unit product cost is:

Gabbert 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?

Routsong Corporation had the following sales and production for the past four years: Selling price per unit, variable cost per unit, and total fixed cost are the same each year. There were no beginning inventories in Year 1. Which of the following statements is NOT correct?

When the number of units in work in process and finished goods inventories decrease, absorption costing net operating income will typically be greater than variable costing net operating income.

Direct materials is considered to be a product cost under variable costing but not absorption costing.

Routit Corporation had the following sales and production for the past four years: Selling price per unit, variable cost per unit, and total fixed cost are the same each year. There were no beginning inventories in Year 1. Which of the following statements is correct?

Gough Corporation has two divisions: Domestic and Foreign. Data from the most recent month appear below: The break-even in sales dollars for the company as a whole is closest to:

Chown Corporation, which has only one product, has provided the following data concerning its most recent month of operations: The total gross margin for the month under the absorption costing approach is:

Bateman Corporation, 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?

Sosinski Corporation has two divisions: Domestic Division and Foreign Division. The following data are for the most recent operating period: The common fixed expenses have been allocated to the divisions on the basis of sales. The company's overall break-even sales is closest to:

Last year, Rassel Corporation's variable costing net operating income was $63,200. Fixed manufacturing overhead costs deferred in inventory under absorption costing amounted to $31,900. What was the absorption costing net operating income last year?

Under variable costing, which of the following is not expensed in its entirety in the period in which it is incurred?

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: The total contribution margin for the month under variable costing is:

Elliot 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 absorption costing?

Managerial Accounting and Cost Concepts

Job-Order Costing

Activity-Based Costing

Process Costing

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Flexible Budgets, Standard Costs, and Variance Analysis

Performance Measurement in Decentralized Organizations

Differential Analysis: the Key to Decision Making

Capital Budgeting Decisions

Statement of Cash Flows

Financial Statement Analysis

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variances

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

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Exam 7: Master Budgeting

The following data were provided by Rider, Inc, which produces a single product: Under absorption costing, the unit product cost is:

Gabbert 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?

Routsong Corporation had the following sales and production for the past four years: Selling price per unit, variable cost per unit, and total fixed cost are the same each year. There were no beginning inventories in Year 1. Which of the following statements is NOT correct?

When the number of units in work in process and finished goods inventories decrease, absorption costing net operating income will typically be greater than variable costing net operating income.

Direct materials is considered to be a product cost under variable costing but not absorption costing.

Routit Corporation had the following sales and production for the past four years: Selling price per unit, variable cost per unit, and total fixed cost are the same each year. There were no beginning inventories in Year 1. Which of the following statements is correct?

Gough Corporation has two divisions: Domestic and Foreign. Data from the most recent month appear below: The break-even in sales dollars for the company as a whole is closest to:

Chown Corporation, which has only one product, has provided the following data concerning its most recent month of operations: The total gross margin for the month under the absorption costing approach is:

Bateman Corporation, 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?

Sosinski Corporation has two divisions: Domestic Division and Foreign Division. The following data are for the most recent operating period: The common fixed expenses have been allocated to the divisions on the basis of sales. The company's overall break-even sales is closest to:

Last year, Rassel Corporation's variable costing net operating income was $63,200. Fixed manufacturing overhead costs deferred in inventory under absorption costing amounted to $31,900. What was the absorption costing net operating income last year?

Under variable costing, which of the following is not expensed in its entirety in the period in which it is incurred?

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: The total contribution margin for the month under variable costing is:

Elliot 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 absorption costing?

Managerial Accounting and Cost Concepts

Job-Order Costing

Activity-Based Costing

Process Costing

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Flexible Budgets, Standard Costs, and Variance Analysis

Performance Measurement in Decentralized Organizations

Differential Analysis: the Key to Decision Making

Capital Budgeting Decisions

Statement of Cash Flows

Financial Statement Analysis

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variances

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

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