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

Net operating income reported under absorption costing will exceed net operating income reported under variable costing for a given period if:

Qu Company,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. )

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 only 6,000 units,what is the unit product cost under each of the following methods?

Pellman Inc., which produces a single product, has provided the following data for its most recent month of operations: There were no beginning or ending inventories. -The unit product cost under variable costing was:

Data for June for Ozaki Corporation and its two major business segments, North and South, appear below: In addition, common fixed expenses totaled $145,000 and were allocated as follows: $73,000 to the North business segment and $72,000 to the South business segment. -The contribution margin of the South business segment is:

The Gasson Company sells three products, Product A, Product B and Product C, and had sales of $1,000,000 during the month of June. The company's overall contribution margin ratio was 37% and fixed expenses totaled $350,000. Sales were: Product A, $500,000; Product B, $300,000; and Product C, $200,000. Traceable fixed costs were: Product A, $120,000; Product B, $100,000; and Product C, $60,000. The variable expenses of Product A were $300,000 and the variable expenses of Product B were $180,000. -The contribution margin ratio for Product C is:

Sugiki Corporation has two divisions: the Alpha Division and the Delta Division.The Alpha Division has sales of $820,000,variable expenses of $369,000,and traceable fixed expenses of $347,300.The Delta Division has sales of $460,000,variable expenses of $294,400,and traceable fixed expenses of $134,100.The total amount of common fixed expenses not traceable to the individual divisions is $97,300.What is the company's net operating income?

Phillipson Corporation has two divisions: the IEB Division and the PIH Division.The corporation's net operating income is $83,900.The IEB Division's divisional segment margin is $149,700 and the PIH Division's divisional segment margin is $60,100.What is the amount of the common fixed expense not traceable to the individual divisions?

Ring, Incorporated's income statement for the most recent month is given below. For each of the following questions, refer back to the original data. -The marketing department believes that a promotional campaign at Store P costing $5,000 will increase sales by $15,000.If the campaign is adopted,overall company net operating income should:

Abe Company, 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?

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. -The contribution margin per unit during July was:

Byron 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,fixed manufacturing overhead cost is treated as a product cost.

Camren Corporation has two major business segments-Apparel and Accessories.Data concerning those segments for December appear below: Common fixed expenses totaled $357,000 and were allocated as follows: $161,000 to the Apparel business segment and $196,000 to the Accessories business segment. Required: Prepare a segmented income statement in the contribution format for the company.Omit percentages;show only dollar amounts.

Hadlock 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:

Under variable costing,the unit product cost would be:

A company using lean production methods likely would show approximately the same net operating income under both absorption and variable costing because:

Fahey Company manufactures a single product that it sells for $25 per unit. The company has the following cost structure: There were no units in beginning inventory. During the year, 18,000 units were produced and 15,000 units were sold. -Under absorption costing,the unit product cost is:

Stephen Company has the following data for its three stores last year: Given the above data,the total company sales were:

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