Question 1

The Carlsbad Corporation produces and markets two types of electronic calculators: Model 4A and Model 5A.The following data were gathered on activities during the third quarter:   Required:
Prepare a segmented income statement for last quarter.The statement should provide sufficient detail to allow the company to evaluate the performance of the manager of each product line.

Accepted Answer

The answer of The Carlsbad Corporation produces and markets two...

Question 2

Segmented statements for internal use should not be prepared using the contribution format.

Accepted Answer

A) True 
 B)False

Question 3

Cadavieco 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 absorption costing.Prepare an income statement for each year.
c.Assume the company uses variable costing.Compute the unit product cost in each year.
d.Assume the company uses variable costing.Prepare an income statement for each year.

Accepted Answer

a.Absorption costing unit product costs:...

Question 4

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

Accepted Answer

A)  $449,317
B)  $134,827
C)  $470,663
D)  $335,836E) B) and C)
F) All of the above

Question 5

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

Accepted Answer

A)  $75,500
B)  $43,200
C)  $55,700
D)  $32,300E) B) and C)
F) A) and B)

Question 6

Ieso Corporation's total fixed expenses for the year were:

Accepted Answer

A)  $40,000
B)  $100,000
C)  $140,000
D)  $170,000E) A) and B)
F) None of the above

Question 7

Under absorption costing, what is McCoy's net operating income for its first year?

Accepted Answer

A)  $266,000
B)  $786,600
C)  $1,261,600
D)  $2,173,600E) A) and B)
F) All of the above

Question 8

Last year, Kirsten Corporation's variable costing net operating income was $63,400.Fixed manufacturing overhead costs released from inventory under absorption costing amounted to $10,700.What was the absorption costing net operating income last year?

Accepted Answer

A)  $10,700
B)  $74,100
C)  $63,400
D)  $52,700E) C) and D)
F) A) and B)

Question 9

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

Accepted Answer

A)  $488,153
B)  $218,355
C)  $266,263
D)  $182,895E) A) and D)
F) A) and C)

Question 10

Badoni Corporation has provided the following data for its two most recent years of operation:    The net operating income (loss) under variable costing in Year 2 is closest to:

Accepted Answer

A)  $180,000
B)  $195,000
C)  $59,000
D)  $7,000E) None of the above
F) A) and C)

Question 11

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

Accepted Answer

A)  $19.00
B)  $44.00
C)  $20.00
D)  $39.00E) B) and C)
F) A) and C)

Question 12

A company has two divisions, each selling several products.If segment reports are prepared for each product, the division managers' salaries should be considered as common fixed costs of the products.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A)  $79 per unit
B)  $95 per unit
C)  $104 per unit
D)  $88 per unitE) A) and C)
F) All of the above

Question 14

If the Northern Division's sales last year were $600,000 higher, how would this have changed Nantuor's net operating income? (Assume no change in selling prices, variable expenses per unit, or fixed expenses.)

Accepted Answer

A)  $240,000 increase
B)  $60,000 increase
C)  $160,000 increase
D)  $1,200,000 increaseE) None of the above
F) B) and C)

Question 15

When unit sales are constant, but the number of units produced fluctuates and everything else remains the same, net operating income under variable costing will:

Accepted Answer

A)  fluctuate in direct proportion to changes in production.
B)  remain constant.
C)  fluctuate inversely with changes in production.
D)  be greater than net operating income under absorption costing.E) None of the above
F) A) and C)

Question 16

Ober Corporation, which has only one product, has provided the following data concerning its most recent month of operations:  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.

Accepted Answer

a.Unit product cost under variable costi...

Question 17

Omstadt Corporation produces and sells only two products that are referred to as RIPS and PITS.Production is "for order" only, and no finished goods inventories are maintained; work in process inventories are negligible.The following data relate to last month's operations:  $36,000 of the manufacturing overhead assigned to RIPS and $72,000 of that assigned to PITS is fixed.The balance of the overhead is variable.Selling expenses consist entirely of commissions paid as a percentage of sales.Direct labor is completely variable.Administrative expenses are fixed and cannot be traced to the products but have been arbitrarily allocated to the products.
Required:
Prepare a segmented income statement, in total and for the two products.Use the contribution approach.

Accepted Answer

The answer of Omstadt Corporation produces and sells only two...

Question 18

What is the net operating income for the month under absorption costing?

Accepted Answer

A)  $6,400
B)  $12,000
C)  $5,600
D)  $(20,400)  E) B) and C)
F) A) and C)

Question 19

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

Accepted Answer

A)  $128,788
B)  $233,364
C)  $177,212
D)  $358,929E) A) and B)
F) All of the above

Question 20

J Corporation has two divisions.Division A has a contribution margin of $79,300 and Division B has a contribution margin of $126,200.If total traceable fixed expenses are $72,400 and total common fixed expenses are $34,900, what is J Corporation's net operating income?

Accepted Answer

A)  $168,000
B)  $170,600
C)  $133,100
D)  $98,200E) B) and C)
F) A) and D)

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

Ober Corporation, which has only one product, has provided the following data concerning its most recent month of operations: 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.

Correct Answer
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a.Unit product cost under variable costi...
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Ieso Corporation's total fixed expenses for the year were:

Correct Answer
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The Western Division's break-even sales is closest to:

Correct Answer
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If the Northern Division's sales last year were $600,000 higher, how would this have changed Nantuor's net operating income? (Assume no change in selling prices, variable expenses per unit, or fixed expenses.)

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

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

Correct Answer
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A company has two divisions, each selling several products.If segment reports are prepared for each product, the division managers' salaries should be considered as common fixed costs of the products.

Correct Answer
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Correct Answer
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a.Absorption costing unit product costs:...
View Answer

Segmented statements for internal use should not be prepared using the contribution format.

Correct Answer
verified

What is the net operating income for the month under absorption costing?

Correct Answer
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When unit sales are constant, but the number of units produced fluctuates and everything else remains the same, net operating income under variable costing will:

Correct Answer
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The Business Division's break-even sales is closest to:

Correct Answer
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Badoni Corporation has provided the following data for its two most recent years of operation: The net operating income (loss) under variable costing in Year 2 is closest to:

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

Correct Answer
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Under absorption costing, what is McCoy's net operating income for its first year?

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

Correct Answer
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J Corporation has two divisions.Division A has a contribution margin of $79,300 and Division B has a contribution margin of $126,200.If total traceable fixed expenses are $72,400 and total common fixed expenses are $34,900, what is J Corporation's net operating income?

Correct Answer
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Last year, Kirsten Corporation's variable costing net operating income was $63,400.Fixed manufacturing overhead costs released from inventory under absorption costing amounted to $10,700.What was the absorption costing net operating income last year?

Correct Answer
verified

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

Ober Corporation, which has only one product, has provided the following data concerning its most recent month of operations: 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.

Correct Answerverifieda.Unit product cost under variable costi...View AnswerShow Answer

Ieso Corporation's total fixed expenses for the year were:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If the Northern Division's sales last year were $600,000 higher, how would this have changed Nantuor's net operating income? (Assume no change in selling prices, variable expenses per unit, or fixed expenses.)

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A company has two divisions, each selling several products.If segment reports are prepared for each product, the division managers' salaries should be considered as common fixed costs of the products.

Correct AnswerverifiedShow Answer

Correct Answerverifieda.Absorption costing unit product costs:...View AnswerShow Answer

Segmented statements for internal use should not be prepared using the contribution format.

Correct AnswerverifiedShow Answer

What is the net operating income for the month under absorption costing?

Correct AnswerverifiedShow Answer

When unit sales are constant, but the number of units produced fluctuates and everything else remains the same, net operating income under variable costing will:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Badoni Corporation has provided the following data for its two most recent years of operation: The net operating income (loss) under variable costing in Year 2 is closest to:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Under absorption costing, what is McCoy's net operating income for its first year?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

J Corporation has two divisions.Division A has a contribution margin of $79,300 and Division B has a contribution margin of $126,200.If total traceable fixed expenses are $72,400 and total common fixed expenses are $34,900, what is J Corporation's net operating income?

Correct AnswerverifiedShow Answer

Last year, Kirsten Corporation's variable costing net operating income was $63,400.Fixed manufacturing overhead costs released from inventory under absorption costing amounted to $10,700.What was the absorption costing net operating income last year?

Correct AnswerverifiedShow Answer

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a.Unit product cost under variable costi...
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a.Absorption costing unit product costs:...
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