6-379
150.
Kosco Corporation produces a single product. The company’s absorption costing income
statement for March follows:
Kosco Corporation
Income Statement
For the Month Ended March 31
Sales (2,400 units)
$48,000
Cost of goods sold
24,000
Gross margin
24,000
Selling and administrative
expenses:
Fixed
$7,200
Variable
9,600
16,800
Net operating income
$7,200
$48,000
During March, the company’s variable production costs were $8 per unit and its fixed
manufacturing overhead totaled $5,000.
Net operating income under variable costing for March would be:
6-380
6-381
151.
Kosco Corporation produces a single product. The company’s absorption costing income
statement for March follows:
Kosco Corporation
Income Statement
For the Month Ended March 31
Sales (2,400 units)
$48,000
Cost of goods sold
24,000
Gross margin
24,000
Selling and administrative
expenses:
Fixed
$7,200
Variable
9,600
16,800
Net operating income
$7,200
$20
Variable expenses:
Variable cost of goods sold
8
Variable selling and administrative ($9,600 ÷ 2,400 units)
4
Contribution margin per unit
During March, the company’s variable production costs were $8 per unit and its fixed
manufacturing overhead totaled $5,000.
The contribution margin per unit during March was:
6-382
6-383
152.
Kosco Corporation produces a single product. The company’s absorption costing income
statement for March follows:
Kosco Corporation
Income Statement
For the Month Ended March 31
Sales (2,400 units)
$48,000
Cost of goods sold
24,000
Gross margin
24,000
Selling and administrative
expenses:
Fixed
$7,200
Variable
9,600
16,800
Net operating income
$7,200
Variable expenses:
Variable cost of goods sold
8
Variable selling and administrative ($9,600 ÷ 2,400 units)
4
Contribution margin per unit
During March, the company’s variable production costs were $8 per unit and its fixed
manufacturing overhead totaled $5,000.
The break-even point in units for the month under variable costing would be:
6-384
6-385
153.
Schweinert Corporation manufactures a single product. The following data pertain to the
company’s operations over the last two years:
Variable costing net operating income, last year
$58,000
Variable costing net operating income, this year
$64,000
Fixed manufacturing overhead costs released from inventory under absorption costing, last
year
$11,000
Fixed manufacturing overhead costs deferred in inventory under absorption costing, this
year
$20,000
Variable costing net operating income
Add fixed manufacturing overhead costs deferred in inventory under absorption costing
Absorption costing net operating income
What was the absorption costing net operating income last year?
6-386
154.
Schweinert Corporation manufactures a single product. The following data pertain to the
company’s operations over the last two years:
Variable costing net operating income, last year
$58,000
Variable costing net operating income, this year
$64,000
Fixed manufacturing overhead costs released from inventory under absorption costing, last
year
$11,000
Fixed manufacturing overhead costs deferred in inventory under absorption costing, this
year
$20,000
Deduct fixed manufacturing overhead costs released from inventory under absorption
Absorption costing net operating income
$84,000
What was the absorption costing net operating income this year?
6-387
155.
Lasorsa Corporation manufactures a single product. Variable costing net operating income
last year was $86,000 and this year was $98,000. Last year, $4,000 in fixed manufacturing
overhead costs were released from inventory under absorption costing. This year, $27,000
in fixed manufacturing overhead costs were deferred in inventory under absorption
costing.
What was the absorption costing net operating income last year?
6-388
156.
Lasorsa Corporation manufactures a single product. Variable costing net operating income
last year was $86,000 and this year was $98,000. Last year, $4,000 in fixed manufacturing
overhead costs were released from inventory under absorption costing. This year, $27,000
in fixed manufacturing overhead costs were deferred in inventory under absorption
costing.
What was the absorption costing net operating income this year?
6-389
157.
Romasanta Corporation manufactures a single product. The following data pertain to the
company’s operations over the last two years:
Variable costing net operating income, last year
$53,600
Variable costing net operating income, this year
$58,600
Beginning inventory, last year
0 units
Ending inventory, last year
1,200 units
Ending in inventory, this year
3,500 units
Fixed manufacturing overhead cost per unit this year and last year
$3 per unit
Variable costing net operating income
Add fixed manufacturing overhead costs deferred in inventory under absorption costing
Absorption costing net operating income
What was the absorption costing net operating income last year?
6-390
158.
Romasanta Corporation manufactures a single product. The following data pertain to the
company’s operations over the last two years:
Variable costing net operating income, last year
$53,600
Variable costing net operating income, this year
$58,600
Beginning inventory, last year
0 units
Ending inventory, last year
1,200 units
Ending in inventory, this year
3,500 units
Fixed manufacturing overhead cost per unit this year and last year
$3 per unit
Variable costing net operating income
Absorption costing net operating income
What was the absorption costing net operating income this year?
6-391
159.
Cervetti Corporation has two major business segments-East and West. In July, the East
business segment had sales revenues of $220,000, variable expenses of $125,000, and
traceable fixed expenses of $29,000. During the same month, the West business segment
had sales revenues of $890,000, variable expenses of $472,000, and traceable fixed
expenses of $169,000. The common fixed expenses totaled $246,000 and were allocated
as follows: $123,000 to the East business segment and $123,000 to the West business
segment.
The contribution margin of the West business segment is:
6-392
160.
Cervetti Corporation has two major business segments-East and West. In July, the East
business segment had sales revenues of $220,000, variable expenses of $125,000, and
traceable fixed expenses of $29,000. During the same month, the West business segment
had sales revenues of $890,000, variable expenses of $472,000, and traceable fixed
expenses of $169,000. The common fixed expenses totaled $246,000 and were allocated
as follows: $123,000 to the East business segment and $123,000 to the West business
segment.
A properly constructed segmented income statement in a contribution format would show
that the segment margin of the East business segment is:
6-393
161.
Cervetti Corporation has two major business segments-East and West. In July, the East
business segment had sales revenues of $220,000, variable expenses of $125,000, and
traceable fixed expenses of $29,000. During the same month, the West business segment
had sales revenues of $890,000, variable expenses of $472,000, and traceable fixed
expenses of $169,000. The common fixed expenses totaled $246,000 and were allocated
as follows: $123,000 to the East business segment and $123,000 to the West 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:
6-394
162.
Nantua Corporation has two divisions, Southern and Northern. The following information
was taken from last year’s income statement segmented by division:
Total Company
Southern
Northern
Sales
$4,000,000
$2,500,000
$1,500,000
Contribution margin
$1,650,000
$1,050,000
$600,000
Divisional segment margin
$850,000
$700,000
$150,000
Net operating income last year for Nantua Corporation was $400,000.
In last year’s income statement segmented by division, what were Nantua’s total common
fixed expenses?
6-395
163.
Nantua Corporation has two divisions, Southern and Northern. The following information
was taken from last year’s income statement segmented by division:
Total Company
Southern
Northern
Sales
$4,000,000
$2,500,000
$1,500,000
Contribution margin
$1,650,000
$1,050,000
$600,000
Divisional segment margin
$850,000
$700,000
$150,000
Net operating income last year for Nantua Corporation was $400,000.
If the Northern Division’s sales last year were $300,000 higher, how would this have
changed Nantua’s net operating income? (Assume no change in selling prices, variable
expenses per unit, or fixed expenses.)
6-396
164.
Higgins Corporation sells three products, Product A, Product B, and Product C. Data
concerning the company’s most recent month of operations, June, appear below:
Products
Total
Company
A
B
C
Sales
$1,500,000
$750,000
$450,000
$300,000
Variable expenses
$450,000
$270,000
Contribution margin ratio
38%
Traceable fixed expenses
$180,000
$150,000
$90,000
6-397
165.
Higgins Corporation sells three products, Product A, Product B, and Product C. Data
concerning the company’s most recent month of operations, June, appear below:
Products
Total
Company
A
B
C
Sales
$1,500,000
$750,000
$450,000
$300,000
Variable expenses
$450,000
$270,000
Contribution margin ratio
38%
Traceable fixed expenses
$180,000
$150,000
$90,000
Sales
$1,500,000
Variable expenses
Contribution margin
Sales
$1,500,000
The total fixed expense for the company was $525,000.
The contribution margin ratio for Product C for June was:
6-398