224. Pen Corporation manufactures a single product. Last year, the company’s variable costing
net operating income was $55,700 and ending inventory increased by 800 units. Fixed
manufacturing overhead cost per unit was $3 in both beginning and ending inventory.
Required:
Determine the absorption costing net operating income for last year. Show your work!
225. Mitchel Corporation manufactures a single product. Last year, variable costing net
operating income was $55,000. The fixed manufacturing overhead costs released from inventory
under absorption costing amounted to $24,000.
Required:
Determine the absorption costing net operating income last year. Show your work!
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226. Corporation Z has two divisions: A & B. The contribution margin for Division A is $188,600
and for Division B it is $196,500. Fixed expenses for Corporation Z are as follows:
Corporate managers’ salaries $150,000
Division A manager’s salary $56,000
Division B manager’s salary $64,000
Maintenance-Division A $9,000
Maintenance-Division B $11,500
Office workers’ salaries-corporate headquarters $62,000
Corporate jet depreciation $70,000
Required:
Prepare a segmented income statement for this company that shows the divisional segment
margins and the company’s net operating income.
227. Pratt Corporation has two major business segments-Apparel and Accessories. Data
concerning those segments for October appear below:
Sales revenues, Apparel $130,000
Variable expenses, Apparel $66,000
Traceable fixed expenses, Apparel $17,000
Sales revenues, Accessories $540,000
Variable expenses, Accessories $270,000
Traceable fixed expenses, Accessories $92,000
Common fixed expenses totaled $153,000 and were allocated as follows: $73,000 to the Apparel
business segment and $80,000 to the Accessories business segment.
Required:
Prepare a segmented income statement in the contribution format for the company. Omit
percentages; show only dollar amounts.
228. Data for March concerning Mauger Corporation’s two major business segments-Fibers
and Feedstocks-appear below:
Sales revenues, Fibers $560,000
Sales revenues, Feedstocks $810,000
Variable expenses, Fibers $235,000
Variable expenses, Feedstocks $348,000
Traceable fixed expenses, Fibers $90,000
Traceable fixed expenses, Feedstocks $113,000
Common fixed expenses totaled $461,000 and were allocated as follows: $249,000 to the Fibers
business segment and $212,000 to the Feedstocks business segment.
Required:
Prepare a segmented income statement in the contribution format for the company. Omit
percentages; show only dollar amounts.
229. Errera Corporation has two major business segments-Retail and Wholesale. In July, the
Retail business segment had sales revenues of $100,000, variable expenses of $54,000, and
traceable fixed expenses of $16,000. During the same month, the Wholesale business segment
had sales revenues of $920,000, variable expenses of $386,000, and traceable fixed expenses of
$156,000. Common fixed expenses totaled $269,000 and were allocated as follows: $156,000 to
the Retail business segment and $113,000 to the Wholesale business segment.
Required:
Prepare a segmented income statement in the contribution format for the company. Omit
percentages; show only dollar amounts.
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230. The Los Angeles Division of Awercamp Manufacturing produces and markets two product
lines: Racquets and Gloves. The following data were gathered on activities last month:
Racquets Gloves
Sales in units 1,000 5,000
Selling price per unit $100 $40
Variable production costs per unit $20 $8
Traceable fixed production costs $20,000 $37,000
Variable selling expenses per unit $11 $2
Traceable fixed selling expenses $10,000 $23,000
Allocated division administrative expenses $6,000 $24,000
Required:
Prepare a segmented income statement for last month.
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231. Walkenhorst Corporation has two divisions: Bulb Division and Seed Division. The
following report is for the most recent operating period:
Bulb
Division Seed
Division
Sales $179,000 $202,000
Variable expenses $102,030 $84,840
Traceable fixed expenses $53,000 $73,000
Common fixed expense $34,010 $38,380
The common fixed expenses have been allocated to the divisions on the basis of sales.
Required:
a. What is the Bulb Division’s break-even in sales dollars?
b. What is the Seed Division’s break-even in sales dollars?
c. What is the company’s overall break-even in sales dollars?
