6-439
199.
Criblez Corporation has two divisions: Blue Division and Gold Division. The following report
is for the most recent operating period:
Total
Company
Blue
Division
Gold
Division
Sales
$431,000
$106,000
$325,000
Variable expenses
154,810
54,060
100,750
Contribution margin
276,190
51,940
224,250
Traceable fixed expenses
177,000
38,000
139,000
Segment margin
99,190
$13,940
$85,250
Common fixed expense
68,960
Net operating income
$30,230
The company’s overall break-even sales is closest to:
6-440
6-441
200.
Criblez Corporation has two divisions: Blue Division and Gold Division. The following
report is for the most recent operating period:
Total Company
Blue Division
Gold Division
Sales
$431,000
$106,000
$325,000
Variable expenses
154,810
54,060
100,750
Contribution margin
276,190
51,940
224,250
Traceable fixed expenses
177,000
38,000
139,000
Segment margin
99,190
$13,940
$85,250
Common fixed expense
68,960
Net operating income
$30,230
What is the company’s overall net operating income if it operates at the break-even points
for its two divisions?
6-442
201.
Phong Corporation has two divisions: Consumer Division and Business Division. The
following data are for the most recent operating period:
Consumer Division
Business Division
Sales
$267,000
$335,000
Variable expenses
$152,190
$73,700
Traceable fixed expenses
$72,000
$191,000
The company’s common fixed expenses total $102,340.
The Consumer Division’s break-even sales is closest to:
6-443
202.
Phong Corporation has two divisions: Consumer Division and Business Division. The
following data are for the most recent operating period:
Consumer Division
Business Division
Sales
$267,000
$335,000
Variable expenses
$152,190
$73,700
Traceable fixed expenses
$72,000
$191,000
The company’s common fixed expenses total $102,340.
The Business Division’s break-even sales is closest to:
6-444
203.
Phong Corporation has two divisions: Consumer Division and Business Division. The
following data are for the most recent operating period:
Consumer Division
Business Division
Sales
$267,000
$335,000
Variable expenses
$152,190
$73,700
Traceable fixed expenses
$72,000
$191,000
Sales
Variable expenses
Traceable fixed expenses
The company’s common fixed expenses total $102,340.
The company’s overall break-even sales is closest to:
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Essay Questions
6-446
204.
Sidell Inc., which produces a single product, has provided the following data for its most
recent month of operation:
Number of units produced
8,000
Variable costs per unit:
Direct materials
$34
Direct labor
$38
Variable manufacturing overhead
$2
Variable selling and administrative
expenses
$2
Fixed costs:
Fixed manufacturing overhead
$576,000
Fixed selling and administrative
expenses
$312,000
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead ($576,000 ÷ 8,000 units)
72
Unit product cost
$146
The company had no beginning or ending inventories.
Required:
Compute the unit product cost under absorption costing. Show your work!
6-447
205.
Ronan Corporation produces a single product and has the following cost structure:
Number of units produced each year
3,000
Variable costs per unit:
Direct materials
$77
Direct labor
$41
Variable manufacturing overhead
$3
Variable selling and administrative
expenses
$5
Fixed costs per year:
Fixed manufacturing overhead
$36,000
Fixed selling and administrative
expenses
$249,000
Required:
Compute the unit product cost under variable costing. Show your work!
Direct materials
Direct labor
Variable manufacturing overhead
Unit product cost
6-448
206.
Ivancevic Inc., which produces a single product, has provided the following data for its
most recent month of operation:
Number of units produced
5,000
Variable costs per unit:
Direct materials
$11
Direct labor
$39
Variable manufacturing overhead
$6
Variable selling and administrative
expenses
$1
Fixed costs:
Fixed manufacturing overhead
$225,000
Fixed selling and administrative
expenses
$465,000
The company had no beginning or ending inventories.
Required:
Compute the unit product cost under variable costing. Show your work!
Direct materials
Direct labor
Variable manufacturing overhead
Unit product cost
6-449
6-450
207.
Sproull Inc., which produces a single product, has provided the following data for its most
recent month of operation:
Number of units produced
2,000
Variable costs per unit:
Direct materials
$21
Direct labor
$75
Variable manufacturing overhead
$7
Variable selling and administrative
expenses
$6
Fixed costs:
Fixed manufacturing overhead
$116,000
Fixed selling and administrative
expenses
$40,000
Direct materials
Direct labor
Variable manufacturing overhea
58
Unit product cost
$161
The company had no beginning or ending inventories.
Required:
a. Compute the unit product cost under absorption costing. Show your work!
b. Compute the unit product cost under variable costing. Show your work!
6-451
6-452
208.
Jimerson Corporation produces a single product and has the following cost structure:
Number of units produced each year
7,000
Variable costs per unit:
Direct materials
$22
Direct labor
$96
Variable manufacturing overhead
$6
Variable selling and administrative
expenses
$2
Fixed costs per year:
Fixed manufacturing overhead
$644,000
Fixed selling and administrative
expenses
$91,000
Direct materials
Direct labor
Variable manufacturing overhead
Unit product cost
Required:
Compute the unit product cost under absorption costing. Show your work!
6-453
209.
Redstone Corporation produces a single product and has the following cost structure:
Number of units produced each year
4,000
Variable costs per unit:
Direct materials
$80
Direct labor
$82
Variable manufacturing overhead
$2
Variable selling and administrative
expenses
$3
Fixed costs per year:
Fixed manufacturing overhead
$176,000
Fixed selling and administrative
expenses
$316,000
Direct materials
Direct labor
Variable manufacturing overhead
44
Unit product cost
$208
Required:
a. Compute the unit product cost under absorption costing. Show your work!
b. Compute the unit product cost under variable costing. Show your work!
6-454
6-455
210.
Nelson Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price
$84
Units in beginning inventory
500
Units produced
1,900
Units sold
2,100
Units in ending inventory
300
Variable costs per unit:
Direct materials
$25
Direct labor
$10
Variable manufacturing overhead
$7
Variable selling and administrative
$10
Fixed costs:
Fixed manufacturing overhead
$38,000
Fixed selling and administrative
$21,000
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.
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.
6-456
6-457
6-458
211.
Oakes Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price
$108
Units in beginning inventory
0
Units produced
1,100
Units sold
900
Units in ending inventory
200
Variable costs per unit:
Direct materials
$28
Direct labor
$30
Variable manufacturing overhead
$7
Variable selling and administrative
$11
Fixed costs:
Fixed manufacturing overhead
$14,300
Fixed selling and administrative
$1,800
Direct materials
Direct labor
Variable manufacturing overhead
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.