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
What was the absorption costing net operating income this year?
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:
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:
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:
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?
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.)
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
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
The total fixed expense for the company was $525,000.
The contribution margin ratio for Product C for June was:
166. 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
The total fixed expense for the company was $525,000.
Common fixed expenses for Higgins Corporation for June were:
167. 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
The total fixed expense for the company was $525,000.
The product line segment margin for Product A for June was:
168. 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
The total fixed expense for the company was $525,000.
The contribution margin in dollars for Product B for June was:
6-214
169. Meyer Corporation has two sales areas: North and South. During April, the contribution
margin in the North was $90,000, or 30% of sales. The segment margin in the South was $25,000,
or 10% of sales. Traceable fixed expenses were $30,000 in the North and $15,000 in the South.
Meyer Corporation reported a total net operating income of $52,000.
The total sales for Meyer Corporation were:
170. Meyer Corporation has two sales areas: North and South. During April, the contribution
margin in the North was $90,000, or 30% of sales. The segment margin in the South was $25,000,
or 10% of sales. Traceable fixed expenses were $30,000 in the North and $15,000 in the South.
Meyer Corporation reported a total net operating income of $52,000.
The total fixed expenses for Meyer Corporation were:
6-218
171. Meyer Corporation has two sales areas: North and South. During April, the contribution
margin in the North was $90,000, or 30% of sales. The segment margin in the South was $25,000,
or 10% of sales. Traceable fixed expenses were $30,000 in the North and $15,000 in the South.
Meyer Corporation reported a total net operating income of $52,000.
The variable costs for the South area were:
172. O’Neill, Incorporated’s segmented income statement for the most recent month is given
below.
Total
Company
Store A
Store B
Sales $300,000 $100,000 $200,000
Variable expenses 192,000 72,000 120,000
Contribution margin 108,000 28,000 80,000
Traceable fixed expenses 76,000 21,000 55,000
Segment margin 32,000 $7,000 $25,000
Common fixed expenses 27,000
Net operating income $5,000
For each of the following questions, refer back to the above original data.
If Store B sales increase by $20,000 with no change in fixed expenses, the overall company net
operating income should: