Question 1

Canon Company has two sales areas: North and South. During last year, the contribution margin in the North Area was $50,000, or 20% of sales. The segment margin in the South was $15,000, or 8% of sales. Traceable fixed expenses are $15,000 in the North and $10,000 in the South. During last year, the company reported total net operating income of $26,000.
-The variable expenses for the South Area for the year were:

Accepted Answer

A) $230,000 
B) $185,000 
C) $162,500 
D) $65,000

Question 2

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

Accepted Answer

A) $102 
B) $130 
C) $97 
D) $125

Question 3

Green Enterprises produces a single product. The following data were provided by the company for the most recent period: 
-Under absorption costing,the unit product cost is:

Accepted Answer

A) $20 
B) $18 
C) $15 
D) $25

Question 4

A segment is any portion or activity of an organization about which a manager seeks revenue,cost,or profit data.

Accepted Answer

A) True 
 B)False

Question 5

The EG Company produces and sells one product.The following data refer to the year just completed:  Assume that direct labor is a variable cost.
Required:
a.Compute the cost of a single unit of product under both the absorption costing and variable costing approaches.
b.Prepare an income statement for the year using absorption costing.
c.Prepare a contribution format income statement for the year using variable costing.
d.Reconcile the absorption costing and variable costing net operating income figures in (b)and (c)above.

Accepted Answer

The answer of The EG Company produces and sells one...

Question 6

Abe 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 variable costing approach?

Accepted Answer

A) $156,600 
B) $210,000 
C) $366,600 
D) $307,800

Question 7

Elbon 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 variable costing?

Accepted Answer

A) $10,200 
B) $(19,000) 
C) $8,800 
D) $1,400

Question 8

Tennison Corporation has two major business segments-Consumer and Commercial. Data for the segment and for the company for May appear below:  In addition, common fixed expenses totaled $371,000 and were allocated as follows: $186,000 to the Consumer business segment and $185,000 to the Commercial business segment.
-The contribution margin of the Commercial business segment is:

Accepted Answer

A) $769,000 
B) $272,000 
C) $313,000 
D) $86,000

Question 9

Carvey Corporation manufactures a variety of products.The following data pertain to the company's operations over the last two years:  Required:
a.Determine the absorption costing net operating income for last year.Show your work!
b.Determine the absorption costing net operating income for this year.Show your work!

Accepted Answer

The answer of Carvey Corporation manufactures a variety of products.The...

Question 10

Jarvinen Company, 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.
-What is the unit product cost for the month under absorption costing?

Accepted Answer

A) $91 
B) $87 
C) $62 
D) $58

Question 11

During April,Division D of Carney Company had a segment margin ratio of 15%,a variable expense ratio of 60% of sales,and traceable fixed expenses of $15,000.Division D's sales were closest to:

Accepted Answer

A) $100,000 
B) $60,000 
C) $33,333 
D) $22,500

Question 12

Roy Corporation produces a single product.During July,Roy produced 10,000 units.Costs incurred during the month were as follows:  Under absorption costing,any unsold units would be carried in the inventory account at a unit product cost of:

Accepted Answer

A) $5.10 
B) $4.40 
C) $3.80 
D) $3.50

Question 13

Last year,Salada Corporation's variable costing net operating income was $97,000.Fixed manufacturing overhead costs released from inventory under absorption costing amounted to $14,000.What was the absorption costing net operating income last year?

Accepted Answer

A) $14,000 
B) $111,000 
C) $97,000 
D) $83,000

Question 14

Contribution margin and segment margin mean the same thing.

Accepted Answer

A) True 
 B)False

Question 15

Falquez Company sells three products: R, S, and T. Data for activity of Falquez Company during July are as follows: Common fixed expenses for July amounted to $90,000.
-The segment margin for Product T was:

Accepted Answer

A) $45,000 
B) $85,000 
C) $(10,000) 
D) $80,000

Question 16

When production is less than sales for the period,absorption costing net operating income will generally be less than variable costing net operating income.

Accepted Answer

A) True 
 B)False

Question 17

Abe 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?

Accepted Answer

A) $156,600 
B) $210,000 
C) $151,200 
D) $366,600

Question 18

Galino Company, 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) $49,400 
B) $18,200 
C) $73,400 
D) $124,800

Question 19

Would the following costs be classified as product or period costs under variable costing at a retail clothing store?

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 20

Ingerson 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 variable costing?

Accepted Answer

A) $12,000 
B) $8,000 
C) $(27,600) 
D) $4,000

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

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

Green Enterprises produces a single product. The following data were provided by the company for the most recent period: -Under absorption costing,the unit product cost is:

A segment is any portion or activity of an organization about which a manager seeks revenue,cost,or profit data.

Abe 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 variable costing approach?

Elbon 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 variable costing?

During April,Division D of Carney Company had a segment margin ratio of 15%,a variable expense ratio of 60% of sales,and traceable fixed expenses of $15,000.Division D's sales were closest to:

Roy Corporation produces a single product.During July,Roy produced 10,000 units.Costs incurred during the month were as follows: Under absorption costing,any unsold units would be carried in the inventory account at a unit product cost of:

Last year,Salada Corporation's variable costing net operating income was $97,000.Fixed manufacturing overhead costs released from inventory under absorption costing amounted to $14,000.What was the absorption costing net operating income last year?

Contribution margin and segment margin mean the same thing.

Falquez Company sells three products: R, S, and T. Data for activity of Falquez Company during July are as follows: Common fixed expenses for July amounted to $90,000. -The segment margin for Product T was:

When production is less than sales for the period,absorption costing net operating income will generally be less than variable costing net operating income.

Abe 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?

Galino Company, 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:

Would the following costs be classified as product or period costs under variable costing at a retail clothing store?

Ingerson 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 variable costing?