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Student name:__________
1) Boylston Corporation has provided the following data for its two most recent years of
operation. The company makes a product that it sells for $75 per unit. It began Year 1 with no
units in beginning inventory.
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 6
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $
112,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $
71,000
Year 1 Year 2
Units produced during the year 8,000 7,000
Units sold during the year 7,000 4,000
Units in ending inventory 1,000 4,000
Required:
a. Assume the company uses absorption costing. Compute the unit product cost in each year.
b. Assume the company uses variable costing. Compute the unit product cost in each year.
c. Assume the company uses absorption costing. Prepare an income statement for each year.
d. Assume the company uses variable costing. Prepare an income statement for each year.
2) Murphy Incorporated, which produces a single product, has provided the following data
for its most recent month of operation:
Number of units produced 16,700
Variable costs per unit:
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Direct materials $ 186
Direct labor $ 79
Variable manufacturing overhead $ 4
Variable selling and administrative expenses $ 14
Fixed costs:
Fixed manufacturing overhead $ 968,600
Fixed selling and administrative expenses $ 300,600
The company had no beginning or ending inventories.
Required:
a. Compute the unit product cost under absorption costing.
b. Compute the unit product cost under variable costing.
3) Masley Corporation has provided the following data for its two most recent years of
operation:
Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 6
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 140,000
In Year 1, 10,000 units were produced and in Year 2, 7,000 units were produced.
Required:
a. Assume the company uses absorption costing. Compute the unit product cost in each year.
b. Assume the company uses variable costing. Compute the unit product cost in each year.
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4) Else Corporation has provided the following data for its two most recent years of
operation:
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 10
Direct labor $ 7
Variable manufacturing overhead $ 3
Fixed manufacturing overhead per year $ 216,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 6
Fixed selling and administrative expense per year $ 72,000
Year 1 Year 2
Units in beginning inventory 0 1,000
Units produced during the year 9,000 12,000
Units sold during the year 8,000 9,000
Units in ending inventory 1,000 4,000
Required:
a.Assume the company uses absorption costing. Compute the unit product cost in each year.
b. Assume the company uses variable costing. Compute the unit product cost in each year.
5) Cadavieco Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 90
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 6
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Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 224,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 74,000
Year 1 Year 2
Units in beginning inventory 0 1,000
Units produced during the year 8,000 7,000
Units sold during the year 7,000 5,000
Units in ending inventory 1,000 3,000
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.
6) Succulent Juice Corporation manufactures and sells premium tomato juice by the gallon.
Succulent just finished its first year of operations. The following data relates to this first year:
Number of gallons produced 75,000
Number of gallons sold 70,000
Selling price $ 3.00 per gallon
Unit product cost under variable costing $ 1.45 per gallon
Total contribution margin $ 84,000
Total fixed manufacturing overhead cost $ 63,000
Total fixed selling & administrative expense $ 10,500
Required:
Using absorption costing, prepare Succulent Juice Corporation’s income statement for the year.
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7) Nelter Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 130
Units in beginning inventory 320
Units produced 6,670
Units sold 6,780
Units in ending inventory 210
Variable costs per unit:
Direct materials $ 42
Direct labor $ 26
Variable manufacturing overhead $ 2
Variable selling and administrative expense $ 20
Fixed costs:
Fixed manufacturing overhead $ 160,080
Fixed selling and administrative expense $ 88,140
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.
8) Miller Corporation produces a single product. The company had the following results for
its first two years of operation:
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Year 1 Year 2
Sales $ 1,200,000 $ 1,200,000
Cost of goods sold 800,000 680,000
Gross margin 400,000 520,000
Selling and administrative expenses 300,000 300,000
Net operating income $ 100,000 $ 220,000
In Year 1, the company produced and sold 40,000 units of its only product; in Year 2, the
company again sold 40,000 units, but increased production to 50,000 units. The company’s
variable production cost is $5 per unit and its fixed manufacturing overhead cost is $600,000 a
year. Fixed manufacturing overhead costs are applied to the product on the basis of each year’s
unit production (i.e., a new fixed manufacturing overhead rate is computed each year). Variable
selling and administrative expenses are $2 per unit sold.
Required:
a.Compute the unit product cost for each year under absorption costing and under variable
costing.
b. Prepare a contribution format income statement for each year using variable costing.
c. Reconcile the variable costing and absorption costing income figures for each year.
d. Explain why the net operating income for Year 2 under absorption costing was higher than
the net operating income for Year 1, although the same number of units were sold in each year.
9) Borunda Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 83
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 9
Direct labor $ 7
Variable manufacturing overhead $ 3
Fixed manufacturing overhead per year $ 360,000
Selling and administrative expenses:
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Variable selling and administrative expense per unit sold $ 6
Fixed selling and administrative expense per year $ 77,000
Year 1 Year 2
Units in beginning inventory 0 2,000
Units produced during the year 10,000 12,000
Units sold during the year 8,000 12,000
Units in ending inventory 2,000 2,000
Required:
a.Assume the company uses absorption costing. Prepare an income statement for each year.
b. Assume the company uses variable costing. Prepare an income statement for each year.
c. Prepare a report in good form reconciling the variable costing and absorption costing net
incomes.
10) Sherwood Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 61
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 6
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 96,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 65,000
Year 1 Year 2
Units in beginning inventory 0 2,000
Units produced during the year 8,000 6,000
Units sold during the year 6,000 5,000
Units in ending inventory 2,000 3,000
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Required:
a.Assume the company uses absorption costing. Compute the unit product cost in each year.
b. Assume the company uses variable costing. Compute the unit product cost in each year.
c. Assume the company uses absorption costing. Prepare an income statement for each year.
d. Assume the company uses variable costing. Prepare an income statement for each year.
e. Prepare a report in good form reconciling the variable costing and absorption costing net
incomes.
11) Waltzer Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 101
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 12
Direct labor $ 7
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 520,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 4
Fixed selling and administrative expense per year $ 72,000
Year 1 Year 2
Units in beginning inventory 0 2,000
Units produced during the year 10,000 13,000
Units sold during the year 8,000 13,000
Units in ending inventory 2,000 2,000
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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.
e. Prepare a report in good form reconciling the variable costing and absorption costing net
incomes.
12) Pacheo 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 770
Units produced 2,400
Units sold 2,850
Units in ending inventory 320
Variable costs per unit:
Direct materials $ 23
Direct labor $ 24
Variable manufacturing overhead $ 2
Variable selling and administrative expense $ 11
Fixed costs:
Fixed manufacturing overhead $ 57,600
Fixed selling and administrative expense $ 5,700
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. What is the unit product cost for the month under variable costing?
b. Prepare a contribution format income statement for the month using variable costing.
c. Without preparing an income statement, determine the absorption costing net operating
income for the month. (Hint: Use the reconciliation method.)
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13) Maher Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 192
Units in beginning inventory 0
Units produced 3,660
Units sold 3,430
Units in ending inventory 230
Variable costs per unit:
Direct materials $ 52
Direct labor $ 53
Variable manufacturing overhead $ 15
Variable selling and administrative expense $ 18
Fixed costs:
Fixed manufacturing overhead $ 135,420
Fixed selling and administrative $ 13,720
Required:
a. What is the unit product cost for the month under variable costing?
b. What is the unit product cost for the month under absorption costing?
c. Prepare a contribution format income statement for the month using variable costing.
d. Prepare an income statement for the month using absorption costing.
e. Reconcile the variable costing and absorption costing net operating incomes for the month.
14) The Dorset Corporation produces and sells a single product. The following data refer to
the year just completed:
Beginning inventory 0
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Units produced 31,600
Units sold 29,600
Selling price per unit $ 414
Selling and administrative expenses:
Variable per unit $ 21
Fixed per year $ 621,600
Manufacturing costs:
Direct materials cost per unit $ 216
Direct labor cost per unit $ 50
Variable manufacturing overhead cost per unit $ 37
Fixed manufacturing overhead per year $ 379,200
Assume that direct labor is a variable cost.
Required:
a. Compute the unit product cost under both the absorption costing and variable costing
approaches.
b. Prepare an income statement for the year using absorption costing.
c. Prepare an income statement for the year using variable costing.
d. Reconcile the absorption costing and variable costing net operating income figures in (b) and
(c) above.
15) 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:
Model 4A Model 5A
Sales in units 5,000 3,000
Sales price per unit $ 100 $ 200
Variable production costs per unit $ 20 $ 40
Traceable fixed production costs $ 200,000 $ 300,000
Variable selling expenses per unit $ 10 $12
Traceable fixed selling expenses $ 10,000 $ 15,000
Allocated portion of corporate expenses $ 116,000 $ 120,000
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.
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16) 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:
RIPS PITS
Sales $ 180,000 $ 180,000
Manufacturing costs:
Materials $ 18,000 $ 24,000
Direct labor $ 54,000 $ 48,000
Overhead $ 72,000 $ 84,000
Selling expenses $ 14,400 $ 10,080
Administrative expenses $ 12,000 $ 18,000
$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.
17) Spiess Corporation has two major business segments—Apparel and Accessories. Data
concerning those segments for December appear below:
Sales revenues, Apparel $ 696,000
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Variable expenses, Apparel $ 363,000
Traceable fixed expenses, Apparel $ 156,000
Sales revenues, Accessories $ 796,000
Variable expenses, Accessories $ 449,000
Traceable fixed expenses, Accessories $ 168,000
Common fixed expenses totaled $299,000 and were allocated as follows: $121,000 to the
Apparel business segment and $178,000 to the Accessories business segment.
Required:
Prepare a segmented income statement in the contribution format for the company.
18) Therrell Corporation has two divisions: Bulb Division and Seed Division. The following
report is for the most recent operating period:
Bulb Division Seed Division
Sales $ 297,000 $ 198,000
Variable expenses $ 77,220 $ 41,580
Traceable fixed expenses $ 115,080 $ 81,180
Common fixed expense $ 28,320 $ 18,880
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?
(For all requirements, do not round intermediate calculations. Round your answer to the
nearest whole dollar amount.)
19) Vancott Incorporated, which produces a single product, has provided the following data
for its most recent month of operation:
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Number of units produced 6,000
Variable costs per unit:
Direct materials $ 93
Direct labor $ 58
Variable manufacturing overhead $ 1
Variable selling and administrative expenses $ 1
Fixed costs:
Fixed manufacturing overhead $ 192,000
Fixed selling and administrative expenses $ 348,000
The company had no beginning or ending inventories.
Required:
Compute the unit product cost under absorption costing. Show your work!
20) Quates 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 $ 27
Direct labor $ 96
Variable manufacturing overhead $ 1
Variable selling and administrative expenses $ 4
Fixed costs:
Fixed manufacturing overhead $ 219,000
Fixed selling and administrative expenses $ 153,000
Required:
Compute the unit product cost under absorption costing. Show your work!
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21) Murphy Incorporated, which produces a single product, has provided the following data
for its most recent month of operation:
Number of units produced 7,000
Variable costs per unit:
Direct materials $ 37
Direct labor $ 43
Variable manufacturing overhead $ 5
Variable selling and administrative expenses $ 1
Fixed costs:
Fixed manufacturing overhead $ 84,000
Fixed selling and administrative expenses $ 119,000
The company had no beginning or ending inventories.
Required:
a. Compute the unit product cost under absorption costing.
b. Compute the unit product cost under variable costing.
22) Olguin 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 $ 15
Direct labor $ 13
Variable manufacturing overhead $ 7
Variable selling and administrative expenses $ 5
Fixed costs:
Fixed manufacturing overhead $ 328,000
Fixed selling and administrative expenses $ 324,000
Required:
a. Compute the unit product cost under absorption costing.
b. Compute the unit product cost under variable costing.
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23) Davitt Corporation produces a single product and has the following cost structure:
Number of units produced each year 1,000
Variable costs per unit:
Direct materials $ 57
Direct labor $ 20
Variable manufacturing overhead $ 2
Variable selling and administrative expenses $ 3
Fixed costs:
Fixed manufacturing overhead $ 88,000
Fixed selling and administrative expenses $ 24,000
Required:
Compute the unit product cost under variable costing.
24) Schlenz Incorporated, which produces a single product, has provided the following data
for its most recent month of operation:
Number of units produced 6,000
Variable costs per unit:
Direct materials $ 12
Direct labor $ 34
Variable manufacturing overhead $ 4
Variable selling and administrative expenses $ 2
Fixed costs:
Fixed manufacturing overhead $ 486,000
Fixed selling and administrative expenses $ 522,000
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The company had no beginning or ending inventories.
Required:
Compute the unit product cost under variable costing.
25) Ober Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 120
Units in beginning inventory 0
Units produced 8,900
Units sold 8,400
Units in ending inventory 500
Variable costs per unit:
Direct materials $ 38
Direct labor $ 36
Variable manufacturing overhead $ 6
Variable selling and administrative expense $ 9
Fixed costs:
Fixed manufacturing overhead $ 151,300
Fixed selling and administrative expense $ 109,200
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.
26) Nelter Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 121
Units in beginning inventory 400
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Units produced 5,600
Units sold 5,800
Units in ending inventory 200
Variable costs per unit:
Direct materials $ 33
Direct labor $ 49
Variable manufacturing overhead $ 1
Variable selling and administrative expense $ 4
Fixed costs:
Fixed manufacturing overhead $ 140,000
Fixed selling and administrative expense $ 52,200
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.
27) Qadir Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 93
Units in beginning inventory 0
Units produced 5,400
Units sold 5,200
Units in ending inventory 200
Variable costs per unit:
Direct materials $ 24
Direct labor $ 27
Variable manufacturing overhead $ 2
Variable selling and administrative expense $ 10
Fixed costs:
Fixed manufacturing overhead $ 108,000
Fixed selling and administrative expense $ 36,400
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Required:
a. What is the unit product cost for the month under variable costing?
b. Prepare a contribution format income statement for the month using variable costing.
c. Without preparing an income statement, determine the absorption costing net operating
income for the month. (Hint: Use the reconciliation method.)
28) Fowler Corporation manufactures a single product. Operating data for the company and
its absorption costing income statements for the last two years are presented below:
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced 18,000 18,000
Units sold 15,000 20,000
Year 1 Year 2
Sales $ 240,000 $ 320,000
Cost of goods sold 150,000 200,000
Gross margin 90,000 120,000
Selling and administrative expenses 80,000 90,000
Net operating income $ 10,000 $ 30,000
Variable manufacturing costs are $6 per unit. Fixed manufacturing overhead totals $72,000 in
each year. This fixed manufacturing overhead is applied at the rate of $4 per unit. Variable
selling and administrative expenses are $2 per unit sold.
Required:
a. Compute the unit product cost in each year under variable costing.
b. Prepare new income statements for each year using variable costing.
c. Reconcile the absorption costing and variable costing net operating income for each year.
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29) Lefelmann Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 138
Units in beginning inventory 500
Units produced 4,100
Units sold 4,300
Units in ending inventory 300
Variable costs per unit:
Direct materials $ 31
Direct labor $ 59
Variable manufacturing overhead $ 4
Variable selling and administrative expense $ 9
Fixed costs:
Fixed manufacturing overhead $ 94,300
Fixed selling and administrative expense $ 47,300
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. What is the unit product cost for the month under variable costing?
b. What is the unit product cost for the month under absorption costing?
c. Prepare a contribution format income statement for the month using variable costing.
d. Prepare an income statement for the month using absorption costing.
e. Reconcile the variable costing and absorption costing net operating incomes for the month.
30) Pacheo Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 55
Units in beginning inventory 500
Units produced 3,100
Units sold 3,300
Units in ending inventory 300
Variable costs per unit:
Direct materials $ 19
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Direct labor $ 26
Variable manufacturing overhead $ 1
Variable selling and administrative expense $ 4
Fixed costs:
Fixed manufacturing overhead $ 12,400
Fixed selling and administrative expense $ 3,300
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. What is the unit product cost for the month under variable costing?
b. Prepare a contribution format income statement for the month using variable costing.
c. Without preparing an income statement, determine the absorption costing net operating
income for the month. (Hint: Use the reconciliation method.)
31) Maher Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 129
Units in beginning inventory 0
Units produced 3,700
Units sold 3,600
Units in ending inventory 100
Variable costs per unit:
Direct materials $ 37
Direct labor $ 38
Variable manufacturing overhead $ 6
Variable selling and administrative expense $ 5
Fixed costs:
Fixed manufacturing overhead $ 103,600
Fixed selling and administrative expense $ 50,400
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Required:
a. What is the unit product cost for the month under variable costing?
b. What is the unit product cost for the month under absorption costing?
c. Prepare a contribution format income statement for the month using variable costing.
d. Prepare an income statement for the month using absorption costing.
e. Reconcile the variable costing and absorption costing net operating incomes for the month.
32) The Dorset Corporation produces and sells a single product. The following data refer to
the year just completed:
Beginning inventory 0
Units produced 9,000
Units sold 7,000
Selling price per unit $ 47
Selling and administrative expenses:
Variable per unit $ 4
Fixed per year $ 58,000
Manufacturing costs:
Direct materials cost per unit $ 10
Direct labor cost per unit $ 6
Variable manufacturing overhead cost per unit $ 5
Fixed manufacturing overhead per year $ 90,000
Assume that direct labor is a variable cost.
Required:
a. Compute the unit product cost under both the absorption costing and variable costing
approaches.
b. Prepare an income statement for the year using absorption costing.
c. Prepare an income statement for the year using variable costing.
d. Reconcile the absorption costing and variable costing net operating income figures in (b) and
(c) above.
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33) Last year, Denogean Corporation’s variable costing net operating income was $64,200
and ending inventory increased by 1,900 units. Fixed manufacturing overhead cost per unit was
$4 in both beginning and ending inventory.
Required:
Determine the absorption costing net operating income for last year.
34) Last year, Rasband Corporation’s variable costing net operating income was $57,000. The
fixed manufacturing overhead costs deferred in inventory under absorption costing amounted to
$30,000.
Required:
Determine the absorption costing net operating income last year.
35) Corbett Corporation manufactures a single product. Last year, variable costing net
operating income was $72,000. The fixed manufacturing overhead costs deferred in inventory
under absorption costing amounted to $29,000.
Required:
Determine the absorption costing net operating income last year.
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36) Worrel 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 $ 71,000
Variable costing net operating income, this year $ 92,000
Fixed manufacturing overhead costs deferred in inventory under
absorption costing, last year $ 2,000
Fixed manufacturing overhead costs released from inventory under
absorption costing, this year $ 11,000
Required:
a. Determine the absorption costing net operating income last year.
b. Determine the absorption costing net operating income this year.
37) Phinisee 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 $ 82,700
Variable costing net operating income, this year $ 87,800
Beginning inventory, last year 0 units
Ending inventory, last year 900 units
Ending inventory, this year 500 units
Fixed manufacturing overhead cost per unit both last year and this
year $ 2 per unit
Required:
a. Determine the absorption costing net operating income for last year.
b. Determine the absorption costing net operating income for this year.
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38) Moises Corporation manufactures a single product. Last year, the company’s variable
costing net operating income was $68,000 and ending inventory decreased by 900 units. Fixed
manufacturing overhead cost per unit was $6 in both beginning and ending inventory.
Required:
Determine the absorption costing net operating income for last year.
39) Spiess Corporation has two major business segments—Apparel and Accessories. Data
concerning those segments for December appear below:
Sales revenues, Apparel $ 370,000
Variable expenses, Apparel $ 185,000
Traceable fixed expenses, Apparel $ 48,000
Sales revenues, Accessories $ 670,000
Variable expenses, Accessories $ 275,000
Traceable fixed expenses, Accessories $ 114,000
Common fixed expenses totaled $309,000 and were allocated as follows: $142,000 to the
Apparel business segment and $167,000 to the Accessories business segment.
Required:
Prepare a segmented income statement in the contribution format for the company. Omit
percentages; show only dollar amounts.
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40) Data for September concerning Greenberger Corporation’s two major business segments-
-Fibers and Feedstocks—appear below:
Sales revenues, Fibers $ 750,000
Sales revenues, Feedstocks $ 620,000
Variable expenses, Fibers $ 368,000
Variable expenses, Feedstocks $ 254,000
Traceable fixed expenses, Fibers $ 98,000
Traceable fixed expenses, Feedstocks $ 112,000
Common fixed expenses totaled $344,000 and were allocated as follows: $175,000 to the Fibers
business segment and $169,000 to the Feedstocks business segment.
Required:
Prepare a segmented income statement in the contribution format for the company. Omit
percentages; show only dollar amounts.
41) Fausnaught Corporation has two major business segments–Retail and Wholesale. In
October, the Retail business segment had sales revenues of $730,000, variable expenses of
$409,000, and traceable fixed expenses of $117,000. During the same month, the Wholesale
business segment had sales revenues of $400,000, variable expenses of $220,000, and traceable
fixed expenses of $48,000. Common fixed expenses totaled $218,000 and were allocated as
follows: $122,000 to the Retail business segment and $96,000 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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42) Therrell Corporation has two divisions: Bulb Division and Seed Division. The following
report is for the most recent operating period:
Bulb Division Seed Division
Sales $ 304,000 $ 183,000
Variable expenses $ 79,040 $ 38,430
Traceable fixed expenses $ 162,000 $ 93,000
Common fixed expense $ 48,640 $ 29,280
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?
43) Zable Corporation has two divisions: Town Division and Country Division. The
following report is for the most recent operating period:
Town Division Country Division
Sales $ 235,000 $ 192,000
Variable expenses $ 103,400 $ 105,600
Traceable fixed expenses $ 80,000 $ 58,000
The company’s common fixed expenses total $68,320.
Required:
a. What is the Town Division’s break-even in sales dollars?
b. What is the Country Division’s break-even in sales dollars?
c. What is the company’s overall break-even in sales dollars?
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44) Petteway Corporation has two divisions: Home Division and Commercial Division. The
following report is for the most recent operating period:
Total Company Home Division Commercial Division
Sales $ 702,000 $ 354,000 $ 348,000
Variable expenses $ 242,460 $ 138,060 $ 104,400
Traceable fixed expenses $ 325,000 $ 152,000 $ 173,000
Common fixed expense $ 77,220 $ 38,940 $ 38,280
The common fixed expenses have been allocated to the divisions on the basis of sales.
Required:
a. What is the Home Division’s break-even in sales dollars?
b. What is the Commercial Division’s break-even in sales dollars?
c. What is the company’s overall break-even in sales dollars?
45) Clouthier Corporation has two divisions: Home Division and Commercial Division. The
following report is for the most recent operating period:
Total Company Home Division Commercial Division
Sales $ 297,000 $ 158,000 $ 139,000
Variable expenses $ 117,790 $ 66,360 $ 51,430
Traceable fixed expenses $ 137,000 $ 69,000 $ 68,000
The company’s common fixed expenses total $29,700.
Required:
a. What is the Home Division’s break-even in sales dollars?
b. What is the Commercial Division’s break-even in sales dollars?
c. What is the company’s overall break-even in sales dollars?
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46) Koff Corporation has two divisions: Garden Division and Farm Division. The following
report is for the most recent operating period:
Total Company Garden Division Farm Division
Sales $ 265,000 $ 163,000 $ 102,000
Variable expenses 105,390 63,570 41,820
Contribution margin 159,610 99,430 60,180
Traceable fixed expenses 110,000 68,000 42,000
Segment margin 49,610 $ 31,430 $ 18,180
Common fixed expenses 31,800
Net operating income $ 17,810
Required:
a. What is the Garden Division’s break-even in sales dollars?
b. What is the Farm Division’s break-even in sales dollars?
c. What is the company’s overall break-even in sales dollars?
d. What would be the company’s overall net operating income if the company operated at its
two division’s break-even points?
47) Kneeland Corporation has two divisions: Grocery Division and Convenience Division.
The following report is for the most recent operating period:
Total Company Grocery Division Convenience Division
Sales $ 427,000 $ 321,000 $ 106,000
Variable expenses 119,380 70,620 48,760
Contribution margin 307,620 250,380 57,240
Traceable fixed expenses 239,000 194,000 45,000
Segment margin 68,620 56,380 12,240
Common fixed expense 46,970 35,310 11,660
Net operating income $ 21,650 $ 21,070 $ 580
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The common fixed expenses have been allocated to the divisions on the basis of sales.
Required:
a. What is the Grocery Division’s break-even in sales dollars?
b. What is the Convenience Division’s break-even in sales dollars?
c. What is the company’s overall break-even in sales dollars?
d. What would be the company’s overall net operating income if the company operated at its
two division’s break-even points?
48) How would the following costs be classified (product or period) under variable costing at
a retail clothing store?
Cost of purchasing clothing Sales commissions
A) Product Product
B) Product Period
C) Period Product
D) Period Period
A) Choice A
B) Choice B
C) Choice C
D) Choice D
49) Which of the following costs at a manufacturing company would be treated as a product
cost under variable costing?
A) direct material cost
B) property taxes on the factory building
C) sales manager’s salary
D) sales commissions
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50) A cost that would be included in product costs under both absorption costing and variable
costing is:
A) supervisory salaries.
B) factory rent.
C) variable manufacturing costs.
D) variable selling expenses.
51) The costing method that treats all fixed costs as period costs is:
A) absorption costing.
B) job-order costing.
C) variable costing.
D) process costing.
52) Assuming that direct labor is a variable cost, the primary difference between the
absorption and variable costing is that:
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A) variable costing treats only direct materials and direct labor as product cost while
absorption costing treats direct materials, direct labor, and the variable portion of manufacturing
overhead as product costs.
B) variable costing treats direct materials, direct labor, the variable portion of
manufacturing overhead, and an allocated portion of fixed manufacturing overhead as product
costs while absorption costing treats only direct materials, direct labor, and the variable portion
of manufacturing overhead as product costs.
C) variable costing treats only direct materials, direct labor, the variable portion of
manufacturing overhead, and the variable portion of selling and administrative expenses as
product cost while absorption costing treats direct materials, direct labor, the variable portion of
manufacturing overhead, and an allocated portion of fixed manufacturing overhead as product
costs.
D) variable costing treats only direct materials, direct labor, and the variable portion of
manufacturing overhead as product costs while absorption costing treats direct materials, direct
labor, the variable portion of manufacturing overhead, and an allocated portion of fixed
manufacturing overhead as product costs.
53) Which of the following is true of a company that uses absorption costing?
A) Net operating income fluctuates directly with changes in sales volume.
B) Fixed production and fixed selling costs are considered to be product costs.
C) Unit product costs can change as a result of changes in the number of units
manufactured.
D) Variable selling expenses are included in product costs.
54) A reason why absorption costing income statements are sometimes difficult to interpret is
that:
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A) they omit variable expenses entirely in computing net operating income.
B) they shift portions of fixed manufacturing overhead from period to period according
to changing levels of inventories.
C) they include all fixed manufacturing overhead on the income statement each year as
a period cost.
D) they ignore inventory levels in determining cost of goods sold.
55) 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:
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.
56) Which of the following will usually be found on an income statement prepared using
absorption costing?
Contribution Margin Gross Margin
A) Yes Yes
B) Yes No
C) No Yes
D) No No
A) Choice A
B) Choice B
C) Choice C
D) Choice D
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57) In its first year of operations, Bronfren Corporation produced 800,000 sets and sold
780,000 sets of artificial tan lines. What would have happened to net operating income in this
first year under the following costing methods if Bronfren had produced 20,000 fewer sets?
(Assume that Bronfren has both variable and fixed production costs.)
Variable costing Absorption costing
A) No effect Increase
B) Decrease Increase
C) Decrease Decrease
D) No effect Decrease
A) Choice A
B) Choice B
C) Choice C
D) Choice D
58) Net operating income computed under variable costing would exceed net operating
income computed using absorption costing if:
A) units sold exceed units produced.
B) units sold are less than units produced.
C) units sold equal units produced.
D) the average fixed cost per unit is zero.
59) Generally speaking, net operating income under variable and absorption costing will:
A) always be equal.
B) never be equal.
C) be equal only when production and sales are equal.
D) be equal only when production exceeds sales.
60) When sales exceed production and the company uses the LIFO inventory flow
assumption, the net operating income reported under variable costing generally will be:
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A) less than net operating income reported under absorption costing.
B) greater than net operating income reported under absorption costing.
C) equal to net operating income reported under absorption costing.
D) higher or lower because no generalization can be made.
61) Hayworth Corporation has just segmented last year’s income statement into its ten
product lines. The chief executive officer (CEO) is curious as to what effect dropping one of the
product lines at the beginning of last year would have had on overall company profit. What is the
best number for the CEO to look at to determine the effect of this elimination on the net
operating income of the company as a whole?
A) the product line’s sales dollars
B) the product line’s contribution margin
C) the product line’s segment margin
D) the product line’s segment margin minus an allocated portion of common fixed
expenses
62) Higado Confectionery Corporation has a number of store locations throughout North
America. In income statements segmented by store, which of the following would be considered
a common fixed cost with respect to the stores?
A) store manager salaries
B) store building depreciation expense
C) the cost of corporate advertising aired during the Super Bowl
D) cost of goods sold at each store
63) The impact on net operating income of a small change in sales for a segment is best
predicted by using:
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A) the contribution margin ratio.
B) the segment margin.
C) the ratio of the segment margin to sales.
D) net sales less segment fixed costs.
64) When using data from a segmented income statement, the dollar sales for a segment to
break even is equal to:
A) Traceable fixed expenses ÷ Segment CM ratio
B) Common fixed expenses ÷ Segment CM ratio
C) (Traceable fixed expenses + Common fixed expenses) ÷ Segment CM ratio
D) Non-traceable fixed expenses ÷ Segment CM ratio
65) Allocating common fixed expenses to business segments:
A) may cause managers to erroneously discontinue business segments.
B) may cause managers to erroneously keep business segments that should be dropped.
C) ensures that all costs are covered.
D) helps managers make good decisions.
66) Mullee 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 $ 51
Direct labor $ 12
Variable manufacturing overhead $ 2
Variable selling and administrative expense $ 5
Fixed costs per year:
Fixed manufacturing overhead $ 441,000
Fixed selling and administrative expense $ 112,000
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The absorption costing unit product cost is:
A) $149 per unit
B) $65 per unit
C) $63 per unit
D) $128 per unit
67) A manufacturing company that produces a single product has provided the following data
concerning its most recent month of operations:
Selling price $ 182
Units in beginning inventory 0
Units produced 13,900
Units sold 13,000
Units in ending inventory 900
Variable costs per unit:
Direct materials $ 54
Direct labor $ 45
Variable manufacturing overhead $ 16
Variable selling and administrative expense $ 15
Fixed costs:
Fixed manufacturing overhead $ 500,400
Fixed selling and administrative expense $ 169,000
What is the total period cost for the month under variable costing?
A) $500,400
B) $364,000
C) $669,400
D) $864,400
68) A manufacturing company that produces a single product has provided the following data
concerning its most recent month of operations:
Selling price $ 121
Units in beginning inventory 0
Units produced 6,000
Units sold 5,600
Units in ending inventory 400
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Variable costs per unit:
Direct materials $ 38
Direct labor $ 53
Variable manufacturing overhead $ 3
Variable selling and administrative expense $ 11
Fixed costs:
Fixed manufacturing overhead $ 60,000
Fixed selling and administrative expense $ 28,000
What is the total period cost for the month under variable costing?
A) $149,600
B) $60,000
C) $88,000
D) $89,600
69) Rhea Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 67
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 10
Direct labor $ 5
Variable manufacturing overhead $ 3
Fixed manufacturing overhead per year $ 252,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 4
Fixed selling and administrative expense per year $ 65,000
Year 1 Year 2
Units in beginning inventory 0 1,000
Units produced during the year 9,000 7,000
Units sold during the year 8,000 7,000
Units in ending inventory 1,000 1,000
The net operating income (loss) under absorption costing in Year 2 is closest to:
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A) $6,000
B) $99,000
C) ($2,000)
D) $71,000
70) Homeyer Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 71
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 12
Direct labor $ 6
Variable manufacturing overhead $ 3
Fixed manufacturing overhead per year $ 264,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 4
Fixed selling and administrative expense per year $ 74,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 11,000 12,000
Units sold during the year 8,000 14,000
Units in ending inventory 3,000 1,000
The net operating income (loss) under absorption costing in Year 1 is closest to:
A) $102,000
B) $30,000
C) $176,000
D) $208,000
71) A manufacturing company that produces a single product has provided the following data
concerning its most recent month of operations:
Units in beginning inventory 0
Units produced 4,200
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Units sold 4,100
Units in ending inventory 100
Variable costs per unit:
Direct materials $ 45
Direct labor $ 47
Variable manufacturing overhead $ 10
Variable selling and administrative expense $ 8
Fixed costs:
Fixed manufacturing overhead $ 88,200
Fixed selling and administrative expense $ 41,000
What is the variable costing unit product cost for the month?
A) $110 per unit
B) $131 per unit
C) $102 per unit
D) $119 per unit
72) A manufacturing company that produces a single product has provided the following data
concerning its most recent month of operations:
Units in beginning inventory 0
Units produced 8,900
Units sold 8,500
Units in ending inventory 400
Variable costs per unit:
Direct materials $ 26
Direct labor $ 25
Variable manufacturing overhead $ 4
Variable selling and administrative expense $ 4
Fixed costs:
Fixed manufacturing overhead $ 249,200
Fixed selling and administrative expense $ 17,000
What is the variable costing unit product cost for the month?
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A) $59 per unit
B) $83 per unit
C) $87 per unit
D) $55 per unit
73) Mccrone Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 59
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 11
Direct labor $ 6
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 88,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 4
Fixed selling and administrative expense per year $ 80,000
Year 1 Year 2
Units in beginning inventory 0 1,000
Units produced during the year 11,000 8,000
Units sold during the year 10,000 5,000
Units in ending inventory 1,000 4,000
The net operating income (loss) under variable costing in Year 1 is closest to:
A) $380,000
B) $340,000
C) $180,000
D) $172,000
74) Kray Incorporated, which produces a single product, has provided the following data for
its most recent month of operations:
Number of units produced 4,100
Variable costs per unit:
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Direct materials $ 42
Direct labor $ 26
Variable manufacturing overhead $ 12
Variable selling and administrative expense $ 5
Fixed costs:
Fixed manufacturing overhead $ 319,800
Fixed selling and administrative expense $ 291,100
There were no beginning or ending inventories. The variable costing unit product cost was:
A) $158 per unit
B) $80 per unit
C) $85 per unit
D) $73 per unit
75) Kray Incorporated, which produces a single product, has provided the following data for
its most recent month of operations:
Number of units produced 6,000
Variable costs per unit:
Direct materials $ 40
Direct labor $ 19
Variable manufacturing overhead $ 8
Variable selling and administrative expense $ 2
Fixed costs:
Fixed manufacturing overhead $ 144,000
Fixed selling and administrative expense $ 198,000
There were no beginning or ending inventories. The variable costing unit product cost was:
A) $91 per unit
B) $67 per unit
C) $69 per unit
D) $61 per unit
76) A manufacturing company that produces a single product has provided the following data
concerning its most recent month of operations:
Selling price $ 133
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Units in beginning inventory 0
Units produced 7,000
Units sold 6,800
Units in ending inventory 200
Variable costs per unit:
Direct materials $ 41
Direct labor $ 57
Variable manufacturing overhead $ 5
Variable selling and administrative expense $ 4
Fixed costs:
Fixed manufacturing overhead $ 133,000
Fixed selling and administrative expense $ 34,000
What is the total period cost for the month under absorption costing?
A) $61,200
B) $133,000
C) $34,000
D) $194,200
77) Beamish Incorporated, which produces a single product, has provided the following data
for its most recent month of operations:
Number of units produced 3,700
Variable costs per unit:
Direct materials $ 132
Direct labor $ 93
Variable manufacturing overhead $ 5
Variable selling and administrative expense $ 12
Fixed costs:
Fixed manufacturing overhead $ 148,000
Fixed selling and administrative expense $ 288,600
There were no beginning or ending inventories. The absorption costing unit product cost was:
A) $225 per unit
B) $270 per unit
C) $230 per unit
D) $360 per unit
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78) Beamish Incorporated, which produces a single product, has provided the following data
for its most recent month of operations:
Number of units produced 8,000
Variable costs per unit:
Direct materials $ 37
Direct labor $ 56
Variable manufacturing overhead $ 4
Variable selling and administrative expense $ 2
Fixed costs:
Fixed manufacturing overhead $ 312,000
Fixed selling and administrative expense $ 448,000
There were no beginning or ending inventories. The absorption costing unit product cost was:
A) $93 per unit
B) $97 per unit
C) $136 per unit
D) $194 per unit
79) A company produces a single product. Variable production costs are $12.30 per unit and
variable selling and administrative expenses are $3.30 per unit. Fixed manufacturing overhead
totals $39,000 and fixed selling and administration expenses total $43,000. Assuming a
beginning inventory of zero, production of 4,300 units and sales of 3,750 units, the dollar value
of the ending inventory under variable costing would be:
A) $6,765
B) $11,715
C) $8,580
D) $4,950
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80) A company produces a single product. Variable production costs are $21 per unit and
variable selling and administrative expenses are $4 per unit. Fixed manufacturing overhead totals
$30,000 and fixed selling and administration expenses total $36,000. Assuming a beginning
inventory of zero, production of 6,000 units and sales of 5,600 units, the dollar value of the
ending inventory under variable costing would be:
A) $10,000
B) $8,400
C) $12,000
D) $14,400
81) A manufacturing company that produces a single product has provided the following data
concerning its most recent month of operations:
Units in beginning inventory 0
Units produced 2,900
Units sold 2,600
Units in ending inventory 300
Variable costs per unit:
Direct materials $ 49
Direct labor $ 58
Variable manufacturing overhead $ 6
Variable selling and administrative expense $ 11
Fixed costs:
Fixed manufacturing overhead $ 55,100
Fixed selling and administrative expense $ 18,200
What is the absorption costing unit product cost for the month?
A) $124 per unit
B) $132 per unit
C) $113 per unit
D) $143 per unit
82) Foggs Corporation has provided the following data for its two most recent years of
operation:
Manufacturing costs:
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Variable manufacturing cost per unit produced:
Direct materials $ 10
Direct labor $ 6
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 520,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 6
Fixed selling and administrative expense per year $ 63,000
Year 1 Year 2
Units in beginning inventory 0 1,000
Units produced during the year 10,000 13,000
Units sold during the year 9,000 11,000
Units in ending inventory 1,000 3,000
The unit product cost under absorption costing in Year 2 is closest to:
A) $40.00
B) $21.00
C) $67.00
D) $61.00
83) Shun Corporation manufactures and sells a hand held calculator. The following
information relates to Shun’s operations for last year:
Unit product cost under variable costing $ 5.20 per unit
Fixed manufacturing overhead cost for the year $ 260,000
Fixed selling and administrative expense for the year $ 180,000
Units (calculators) produced and sold 400,000
What is Shun’s absorption costing unit product cost for last year?
A) $4.10 per unit
B) $4.55 per unit
C) $5.85 per unit
D) $6.30 per unit
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84) Badoni Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 85
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 10
Direct labor $ 6
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 96,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 77,000
Year 1 Year 2
Units in beginning inventory 0 1,000
Units produced during the year 8,000 6,000
Units sold during the year 7,000 3,000
Units in ending inventory 1,000 4,000
The net operating income (loss) under variable costing in Year 2 is closest to:
A) $180,000
B) $195,000
C) $59,000
D) $7,000
85) Bitonti Corporation has provided the following data for its most recent year of operation:
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 9
Direct labor $ 7
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 156,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 81,000
Units in beginning inventory 0
Units produced during the year 12,000
Units sold during the year 11,000
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Units in ending inventory 1,000
The unit product cost under absorption costing is closest to:
A) $34.00
B) $21.00
C) $13.00
D) $39.00
86) Stoneberger 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 $ 50
Direct labor $ 72
Variable manufacturing overhead $ 6
Variable selling and administrative expense $ 3
Fixed costs per year:
Fixed manufacturing overhead $ 296,000
Fixed selling and administrative expense $ 76,000
The variable costing unit product cost is:
A) $128 per unit
B) $125 per unit
C) $202 per unit
D) $131 per unit
87) Silver Corporation produces a single product. Last year, the company’s variable
production costs totaled $7,500 and its fixed manufacturing overhead costs totaled $4,500. The
company produced 3,000 units during the year and sold 2,400 units. There were no units in the
beginning inventory. Which of the following statements is true?
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A) Under variable costing, the units in the ending inventory will be costed at $4.00 each.
B) The net operating income under absorption costing for the year will be $900 lower
than the net operating income under variable costing.
C) The ending inventory under variable costing will be $900 lower than the ending
inventory under absorption costing.
D) Under absorption costing, the units in ending inventory will be costed at $2.50 each.
88) Kaaua Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 83
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 7
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 396,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 4
Fixed selling and administrative expense per year $ 72,000
Year 1 Year 2
Units in beginning inventory 0 2,000
Units produced during the year 12,000 11,000
Units sold during the year 10,000 9,000
Units in ending inventory 2,000 4,000
Which of the following statements is true for Year 2?
A) The amount of fixed manufacturing overhead deferred in inventories is $534,000
B) The amount of fixed manufacturing overhead released from inventories is $78,000
C) The amount of fixed manufacturing overhead released from inventories is $534,000
D) The amount of fixed manufacturing overhead deferred in inventories is $78,000
89) Simila Corporation has provided the following data for its most recent year of operation:
Manufacturing costs:
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Variable manufacturing cost per unit produced:
Direct materials $ 11
Direct labor $ 7
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 308,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 81,000
Units in beginning inventory 0
Units produced during the year 11,000
Units sold during the year 9,000
Units in ending inventory 2,000
Which of the following statements is true?
A) The amount of fixed manufacturing overhead released from inventories is $459,000
B) The amount of fixed manufacturing overhead deferred in inventories is $56,000
C) The amount of fixed manufacturing overhead released from inventories is $56,000
D) The amount of fixed manufacturing overhead deferred in inventories is $459,000
90) A manufacturing company that produces a single product has provided the following data
concerning its most recent month of operations:
Selling price $ 130
Units in beginning inventory 0
Units produced 2,100
Units sold 1,900
Units in ending inventory 200
Variable costs per unit:
Direct materials $ 41
Direct labor $ 39
Variable manufacturing overhead $ 4
Variable selling and administrative expense $ 11
Fixed costs:
Fixed manufacturing overhead $ 52,500
Fixed selling and administrative expense $ 3,800
What is the net operating income for the month under variable costing?
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A) $15,200
B) $(6,600)
C) $10,200
D) $5,000
91) A manufacturing company that produces a single product has provided the following data
concerning its most recent month of operations:
Selling price $ 140
Units in beginning inventory 0
Units produced 3,150
Units sold 2,760
Units in ending inventory 390
Variable costs per unit:
Direct materials $ 47
Direct labor $ 18
Variable manufacturing overhead $ 10
Variable selling and administrative expense $ 19
Fixed costs:
Fixed manufacturing overhead $ 107,100
Fixed selling and administrative expense $ 24,840
The total gross margin for the month under absorption costing is:
A) $85,560
B) $8,280
C) $116,160
D) $126,960
92) A manufacturing company that produces a single product has provided the following data
concerning its most recent month of operations:
Selling price $ 117
Units in beginning inventory 0
Units produced 2,900
Units sold 2,500
Units in ending inventory 400
Variable costs per unit:
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Direct materials $ 32
Direct labor $ 45
Variable manufacturing overhead $ 2
Variable selling and administrative expense $ 9
Fixed costs:
Fixed manufacturing overhead $ 43,500
Fixed selling and administrative expense $ 15,000
The total gross margin for the month under absorption costing is:
A) $72,500
B) $95,100
C) $20,000
D) $57,500
93) The following data pertain to last year’s operations at Clarkson, Incorporated, a company
that produces a single product:
Units in beginning inventory 0
Units produced 100,000
Units sold 98,000
Selling price per unit $ 10.00
Variable costs per unit:
Direct materials $ 1.50
Direct labor $ 2.50
Variable manufacturing overhead $ 1.00
Variable selling and administrative expense $ 2.00
Fixed expenses per year:
Fixed manufacturing overhead $ 200,000
Fixed selling and administrative expense $ 50,000
What was the absorption costing net operating income last year?
A) $44,000
B) $48,000
C) $50,000
D) $49,000
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94) A manufacturing company that produces a single product has provided the following data
concerning its most recent month of operations:
Selling price $ 88
Units in beginning inventory 0
Units produced 5,200
Units sold 4,900
Units in ending inventory 300
Variable costs per unit:
Direct materials $ 12
Direct labor $ 23
Variable manufacturing overhead $ 2
Variable selling and administrative expense $ 5
Fixed costs:
Fixed manufacturing overhead $ 161,200
Fixed selling and administrative expense $ 63,700
The total contribution margin for the month under variable costing is:
A) $64,200
B) $249,900
C) $225,400
D) $98,000
95) A manufacturing company that produces a single product has provided the following data
concerning its most recent month of operations:
Selling price $ 134
Units in beginning inventory 0
Units produced 7,600
Units sold 7,300
Units in ending inventory 300
Variable costs per unit:
Direct materials $ 49
Direct labor $ 52
Variable manufacturing overhead $ 6
Variable selling and administrative expense $ 11
Fixed costs:
Fixed manufacturing overhead $ 68,400
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Fixed selling and administrative expense $ 36,500
What is the net operating income for the month under absorption costing?
A) $11,900
B) $(20,200)
C) $14,600
D) $2,700
96) Bellue Incorporated manufactures a single product. Variable costing net operating
income was $98,200 last year and its inventory decreased by 2,700 units. Fixed manufacturing
overhead cost was $3 per unit for both units in beginning and in ending inventory. What was the
absorption costing net operating income last year?
A) $8,100
B) $90,100
C) $98,200
D) $100,900
97) Bellue Incorporated manufactures a single product. Variable costing net operating
income was $96,300 last year and its inventory decreased by 2,600 units. Fixed manufacturing
overhead cost was $1 per unit for both units in beginning and in ending inventory. What was the
absorption costing net operating income last year?
A) $2,600
B) $93,700
C) $96,300
D) $98,900
98) A company that produces a single product had a net operating income of $77,000 using
variable costing and a net operating income of $98,840 using absorption costing. Total fixed
manufacturing overhead was $52,020 and production was 10,200 units. This year was the first
year of operations. Between the beginning and the end of the year, the inventory level:
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A) decreased by 21,840 units
B) increased by 21,840 units
C) decreased by 4,282 units
D) increased by 4,282 units
99) A company that produces a single product had a net operating income of $65,000 using
variable costing and a net operating income of $95,000 using absorption costing. Total fixed
manufacturing overhead was $60,000 and production was 10,000 units. This year was the first
year of operations. Between the beginning and the end of the year, the inventory level:
A) decreased by 5,000 units
B) increased by 5,000 units
C) decreased by 30,000 units
D) increased by 30,000 units
100) Croft Corporation produces a single product. Last year, the company had a net operating
income of $100,640 using absorption costing and $75,800 using variable costing. The fixed
manufacturing overhead cost was $12 per unit. There were no beginning inventories. If 27,900
units were produced last year, then sales last year were:
A) 3,060 units
B) 25,830 units
C) 29,970 units
D) 52,740 units
101) Croft Corporation produces a single product. Last year, the company had a net operating
income of $160,000 using absorption costing and $149,000 using variable costing. The fixed
manufacturing overhead cost was $10 per unit. There were no beginning inventories. If 43,000
units were produced last year, then sales last year were:
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A) 32,000 units
B) 40,000 units
C) 41,900 units
D) 54,000 units
102) Pungent Corporation manufactures and sells a spice rack. Shown below are the actual
operating results for the first two years of operations:
Year 1 Year 2
Units (spice racks) produced 40,000 40,000
Units (spice racks) sold 37,000 41,000
Absorption costing net operating income $ 44,000 $ 52,000
Variable costing net operating income $ 38,000 ???
Pungent’s selling price and unit variable cost and total fixed cost were the same for both years.
What is Pungent’s variable costing net operating income for Year 2?
A) $48,000
B) $50,000
C) $54,000
D) $56,000
103) 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?
A) $10,700
B) $74,100
C) $63,400
D) $52,700
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104) Last year, Tinklenberg Corporation’s variable costing net operating income was $52,400
and its inventory decreased by 1,400 units. Fixed manufacturing overhead cost was $8 per unit
for both units in beginning and in ending inventory. What was the absorption costing net
operating income last year?
A) $41,200
B) $11,200
C) $63,600
D) $52,400
105) Sipho Corporation manufactures a single product. Last year, the company’s variable
costing net operating income was $90,900. Fixed manufacturing overhead costs released from
inventory under absorption costing amounted to $21,900. What was the absorption costing net
operating income last year?
A) $69,000
B) $90,900
C) $21,900
D) $112,800
106) Truo Corporation produces a single product. Last year, the company had net operating
income of $100,000 using variable costing. Beginning and ending inventories were 13,000 units
and 18,000 units, respectively. If the fixed manufacturing overhead cost was $4 per unit both last
year and this year, what would have been the net operating income using absorption costing?
A) $80,000
B) $100,000
C) $120,000
D) $172,000
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107) Corbel Corporation has two divisions: Division A and Division B. Last month, the
company reported a contribution margin of $47,800 for Division A. Division B had a
contribution margin ratio of 25% and its sales were $235,000. Net operating income for the
company was $35,700 and traceable fixed expenses were $55,400. Corbel Corporation’s
common fixed expenses were:
A) $15,450
B) $55,400
C) $70,850
D) $106,550
108) Corbel Corporation has two divisions: Division A and Division B. Last month, the
company reported a contribution margin of $60,000 for Division A. Division B had a
contribution margin ratio of 40% and its sales were $300,000. Net operating income for the
company was $40,000 and traceable fixed expenses were $80,000. Corbel Corporation’s
common fixed expenses were:
A) $140,000
B) $60,000
C) $100,000
D) $80,000
109) Miscavage Corporation has two divisions: the Beta Division and the Alpha Division. The
Beta Division has sales of $295,000, variable expenses of $150,600, and traceable fixed
expenses of $69,800. The Alpha Division has sales of $605,000, variable expenses of $333,800,
and traceable fixed expenses of $131,100. The total amount of common fixed expenses not
traceable to the individual divisions is $132,200. What is the company’s net operating income?
A) $214,700
B) $415,600
C) $82,500
D) $271,200
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110) Miscavage Corporation has two divisions: the Beta Division and the Alpha Division. The
Beta Division has sales of $580,000, variable expenses of $301,600, and traceable fixed
expenses of $186,500. The Alpha Division has sales of $510,000, variable expenses of $178,500,
and traceable fixed expenses of $222,100. The total amount of common fixed expenses not
traceable to the individual divisions is $235,500. What is the company’s net operating income?
A) $374,400
B) $201,300
C) $609,900
D) ($34,200)
111) Younie Corporation has two divisions: the South Division and the West Division. The
corporation’s net operating income is $95,700. The South Division’s divisional segment margin is
$44,300 and the West Division’s divisional segment margin is $169,600. What is the amount of
the common fixed expense not traceable to the individual divisions?
A) $265,300
B) $213,900
C) $118,200
D) $140,000
112) Younie Corporation has two divisions: the South Division and the West Division. The
corporation’s net operating income is $26,900. The South Division’s divisional segment margin is
$42,800 and the West Division’s divisional segment margin is $29,900. What is the amount of
the common fixed expense not traceable to the individual divisions?
A) $56,800
B) $69,700
C) $72,700
D) $45,800
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113) Carroll Corporation has two products, Q and P. During June, the company’s net operating
income was $25,500, and the common fixed expenses were $55,000. The contribution margin
ratio for Product Q was 40%, its sales were $140,000, and its segment margin was $47,000. If
the contribution margin for Product P was $45,000, the segment margin for Product P was:
A) $33,500
B) $47,000
C) $8,000
D) $80,500
114) Carroll Corporation has two products, Q and P. During June, the company’s net operating
income was $25,000, and the common fixed expenses were $37,000. The contribution margin
ratio for Product Q was 30%, its sales were $200,000, and its segment margin was $21,000. If
the contribution margin for Product P was $80,000, the segment margin for Product P was:
A) $62,000
B) $59,000
C) $37,000
D) $41,000
115) 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?
A) $168,000
B) $170,600
C) $133,100
D) $98,200
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116) Uchimura Corporation has two divisions: the AFE Division and the GBI Division. The
corporation’s net operating income is $11,900. The AFE Division’s divisional segment margin is
$82,100 and the GBI Division’s divisional segment margin is $47,100. What is the amount of the
common fixed expense not traceable to the individual divisions?
A) $94,000
B) $117,300
C) $59,000
D) $129,200
117) Uchimura Corporation has two divisions: the AFE Division and the GBI Division. The
corporation’s net operating income is $42,000. The AFE Division’s divisional segment margin is
$15,700 and the GBI Division’s divisional segment margin is $175,400. What is the amount of
the common fixed expense not traceable to the individual divisions?
A) $149,100
B) $57,700
C) $217,400
D) $191,100
118) Chang Corporation has two divisions, T and W. The company’s overall contribution
margin ratio is 40%, with sales in the two divisions totaling $900,000. If variable expenses are
$200,000 in Division T and if Division W’s contribution margin ratio is 20%, the sales in
Division W must be:
A) $200,000
B) $425,000
C) $700,000
D) $340,000
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119) Toxemia Salsa Corporation manufactures five flavors of salsa. Last year, Toxemia
generated net operating income of $40,000. The following information was taken from last year’s
income statement segmented by flavor (brackets indicate a negative amount):
Wimpy Mild Medium Hot Atomic
Contribution margin $ (2,000) $ 45,000 $ 35,000 $ 50,000 $
162,000
Segment margin $ (16,000) $ (5,000) $ 7,000 $ 10,000 $ 94,000
Allocated common fixed expenses $ 10,000 $10,000 $ 10,000 $
10,000 $ 10,000
Segment margin less allocated
common fixed expenses $ (26,000) $ (15,000) $ (3,000) $ 0 $
84,000
Toxemia expects similar operating results for the upcoming year. If Toxemia wants to maximize
its profitability in the upcoming year, which flavor or flavors should Toxemia discontinue?
A) no flavors should be discontinued
B) Wimpy
C) Wimpy and Mild
D) Wimpy, Mild, and Medium
120) Dukelow Corporation has two divisions: the Governmental Products Division and the
Export Products Division. The Governmental Products Division’s divisional segment margin is
$37,800 and the Export Products Division’s divisional segment margin is $90,200. The total
amount of common fixed expenses not traceable to the individual divisions is $101,200. What is
the company’s net operating income (loss)?
A) $229,200
B) $128,000
C) $26,800
D) ($128,000)
121) Dukelow Corporation has two divisions: the Governmental Products Division and the
Export Products Division. The Governmental Products Division’s divisional segment margin is
$255,000 and the Export Products Division’s divisional segment margin is $59,800. The total
amount of common fixed expenses not traceable to the individual divisions is $163,700. What is
the company’s net operating income?
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A) $314,800
B) ($314,800)
C) $151,100
D) $478,500
122) Eyestone Corporation has two divisions, A and B. The following data pertain to
operations in October:
Division A Division B
Sales $ 80,000 $ 170,000
Variable expenses as a percentage of sales 60% 80%
Segment margin $ 10,000 $ 25,000
If common fixed expenses were $17,000, total fixed expenses were:
A) $48,000
B) $13,000
C) $31,000
D) $53,000
123) Gulinson Corporation has two divisions: Division A and Division B. Data from the most
recent month appear below:
Total Company Division A Division B
Sales $ 591,000 $ 222,000 $ 369,000
Variable expenses 275,580 113,220 162,360
Contribution margin 315,420 108,780 206,640
Traceable fixed expenses 195,000 66,000 129,000
Segment margin 120,420 $ 42,780 $ 77,640
Common fixed expenses 65,010
Net operating income $ 55,410
The break-even in sales dollars for Division A is closest to:
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A) $134,694
B) $184,531
C) $487,179
D) $267,367
124) Combe Corporation has two divisions: Alpha and Beta. Data from the most recent month
appear below:
Alpha Beta
Sales $ 203,000 $ 280,400
Variable expenses $ 136,010 $ 158,800
Traceable fixed expenses $ 90,090 $ 86,700
The company’s common fixed expenses total $94,500. The break-even in sales dollars for Alpha
Division is closest to:
A) $559,364
B) $273,000
C) $108,500
D) $286,364
125) Combe Corporation has two divisions: Alpha and Beta. Data from the most recent month
appear below:
Alpha Beta
Sales $ 190,000 $ 315,000
Variable expenses $ 58,900 $ 151,200
Traceable fixed expenses $ 99,000 $ 107,000
The company’s common fixed expenses total $80,800. The break-even in sales dollars for Alpha
Division is closest to:
A) $491,129
B) $143,478
C) $187,536
D) $260,580
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126) Delisa Corporation has two divisions: Division L and Division Q. Data from the most
recent month appear below:
Total Company Division L Division Q
Sales $ 474,000 $ 153,000 $ 321,000
Variable expenses 255,510 91,800 163,710
Contribution margin 218,490 61,200 157,290
Traceable fixed expenses 112,850 29,890 82,960
Segment margin 105,640 $ 31,310 $ 74,330
Common fixed expenses 56,250
Net operating income $ 49,390
The break-even in sales dollars for Division Q is closest to:
A) $281,950
B) $169,306
C) $272,961
D) $436,980
127) Delisa Corporation has two divisions: Division L and Division Q. Data from the most
recent month appear below:
Total Company Division L Division Q
Sales $ 517,000 $ 156,000 $ 361,000
Variable expenses 255,960 82,680 173,280
Contribution margin 261,040 73,320 187,720
Traceable fixed expenses 171,000 49,000 122,000
Segment margin 90,040 $ 24,320 $ 65,720
Common fixed expenses 87,890
Net operating income $ 2,150
The break-even in sales dollars for Division Q is closest to:
A) $352,635
B) $234,615
C) $403,635
D) $512,742
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128) Fernstrom Corporation has two divisions: East and West. Data from the most recent
month appear below:
East West
Sales $ 330,000 $ 144,000
Variable expenses $ 132,000 $ 76,320
Traceable fixed expenses $ 140,000 $ 43,000
The company’s common fixed expenses total $52,140. If the company operates at exactly the
break-even sales of the East Division and West Division, what would be the company’s overall
net operating income?
A) $0
B) ($235,140)
C) ($52,140)
D) $30,540
129) Holts Corporation has two divisions: Xi and Sigma. Data from the most recent month
appear below:
Xi Sigma
Sales $ 311,000 $ 346,000
Variable expenses $ 65,310 $ 169,540
Traceable fixed expenses $ 176,000 $ 135,000
The company’s common fixed expenses total $78,840. The break-even in sales dollars for the
company as a whole is closest to:
A) $487,491
B) $606,715
C) $466,018
D) $119,225
130) WV Construction has two divisions: Remodeling and New Home Construction. Each
division has an on-site supervisor who is paid a salary of $118,000 annually and one salaried
estimator who is paid $64,000 annually. The corporate office has two office administrative
assistants who are paid salaries of $68,000 and $46,000 annually. The president’s salary is
$180,000. How much of these salaries are common fixed expenses?
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A) $180,000
B) $294,000
C) $114,000
D) $398,000
131) WV Construction has two divisions: Remodeling and New Home Construction. Each
division has an on-site supervisor who is paid a salary of $58,000 annually and one salaried
estimator who is paid $52,000 annually. The corporate office has two office administrative
assistants who are paid salaries of $38,000 and $31,000 annually. The president’s salary is
$127,000. How much of these salaries are common fixed expenses?
A) $127,000
B) $110,000
C) $196,000
D) $306,000
132) Nuzum Corporation has two divisions: Division M and Division N. Data from the most
recent month appear below:
Total Company Division M Division N
Sales $ 557,000 $ 254,000 $ 303,000
Variable expenses 144,910 81,280 63,630
Contribution margin 412,090 172,720 239,370
Traceable fixed expenses 273,000 128,000 145,000
Segment margin 139,090 44,720 94,370
Common fixed expenses 94,690 43,180 51,510
Net operating income $ 44,400 $ 1,540 $ 42,860
Management has allocated common fixed expenses to the Divisions based on their sales. The
break-even in sales dollars for Division N is closest to:
A) $248,747
B) $496,987
C) $183,544
D) $303,405
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133) Mckissic Corporation has two divisions: Domestic and Foreign. Data from the most
recent month appear below:
Total Company Domestic Foreign
Sales $ 450,000 $ 119,000 $ 331,000
Variable expenses 157,240 38,080 119,160
Contribution margin 292,760 80,920 211,840
Traceable fixed expenses 226,000 57,000 169,000
Segment margin 66,760 $ 23,920 $ 42,840
Common fixed expenses 58,500
Net operating income $ 8,260
The break-even in sales dollars for the company as a whole is closest to:
A) $437,304
B) $347,886
C) $394,323
D) $89,418
134) Muckleroy Corporation has two divisions: Division K and Division L. Data from the
most recent month appear below:
Total Company Division K Division L
Sales $ 544,000 $ 248,000 $ 296,000
Variable expenses 187,760 54,560 133,200
Contribution margin 356,240 193,440 162,800
Traceable fixed expenses 254,000 136,000 118,000
Segment margin 102,240 57,440 44,800
Common fixed expenses 54,400 24,800 29,600
Net operating income $ 47,840 $ 32,640 $ 15,200
Management has allocated common fixed expenses to the Divisions based on their sales. The
break-even in sales dollars for Division K is closest to:
A) $244,103
B) $206,154
C) $174,359
D) $470,945
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135) Carlton Corporation has two divisions: Delta and Echo. Data from the most recent month
appear below:
Delta Echo
Sales $ 254,000 $ 147,000
Variable expenses $ 91,440 $ 86,730
Traceable fixed expenses $ 99,000 $ 44,000
The company’s common fixed expenses total $44,110. The break-even in sales dollars for Echo
Division is closest to:
A) $146,756
B) $336,719
C) $214,902
D) $107,317
136) Caruso Incorporated, which produces a single product, has provided the following data
for its most recent month of operations:
Number of units produced 4,000
Variable costs per unit:
Direct materials $ 39
Direct labor $ 71
Variable manufacturing overhead $ 5
Variable selling and administrative expense $ 8
Fixed costs:
Fixed manufacturing overhead $ 220,000
Fixed selling and administrative expense $ 308,000
There were no beginning or ending inventories.
The unit product cost under absorption costing was:
A) $170 per unit
B) $115 per unit
C) $255 per unit
D) $110 per unit
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137) Caruso Incorporated, which produces a single product, has provided the following data
for its most recent month of operations:
Number of units produced 4,000
Variable costs per unit:
Direct materials $ 39
Direct labor $ 71
Variable manufacturing overhead $ 5
Variable selling and administrative expense $ 8
Fixed costs:
Fixed manufacturing overhead $ 220,000
Fixed selling and administrative expense $ 308,000
There were no beginning or ending inventories.
The unit product cost under variable costing was:
A) $115 per unit
B) $123 per unit
C) $118 per unit
D) $170 per unit
138) Davison Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 95
Units in beginning inventory 0
Units produced 5,000
Units sold 4,900
Units in ending inventory 100
Variable costs per unit:
Direct materials $ 26
Direct labor $ 40
Variable manufacturing overhead $ 1
Variable selling and administrative expense $ 4
Fixed costs:
Fixed manufacturing overhead $ 40,000
Fixed selling and administrative expense $ 73,500
What is the total period cost for the month under variable costing?
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A) $133,100
B) $113,500
C) $40,000
D) $93,100
139) Davison Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 95
Units in beginning inventory 0
Units produced 5,000
Units sold 4,900
Units in ending inventory 100
Variable costs per unit:
Direct materials $ 26
Direct labor $ 40
Variable manufacturing overhead $ 1
Variable selling and administrative expense $ 4
Fixed costs:
Fixed manufacturing overhead $ 40,000
Fixed selling and administrative expense $ 73,500
What is the total period cost for the month under the absorption costing?
A) $93,100
B) $133,100
C) $40,000
D) $73,500
140) Tat 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 $ 77
Direct labor $ 89
Variable manufacturing overhead $ 5
Variable selling and administrative expense $ 3
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Fixed costs:
Fixed manufacturing overhead $ 532,000
Fixed selling and administrative expense $ 574,000
The unit product cost under absorption costing is:
A) $247 per unit
B) $166 per unit
C) $332 per unit
D) $171 per unit
141) Tat 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 $ 77
Direct labor $ 89
Variable manufacturing overhead $ 5
Variable selling and administrative expense $ 3
Fixed costs:
Fixed manufacturing overhead $ 532,000
Fixed selling and administrative expense $ 574,000
The unit product cost under variable costing is:
A) $169 per unit
B) $171 per unit
C) $247 per unit
D) $174 per unit
142) Baughn Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 115
Units in beginning inventory 0
Units produced 6,600
Units sold 6,400
Units in ending inventory 200
Variable costs per unit:
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Direct materials $ 26
Direct labor $ 46
Variable manufacturing overhead $ 7
Variable selling and administrative expense $ 9
Fixed costs:
Fixed manufacturing overhead $ 105,600
Fixed selling and administrative expense $ 51,200
What is the unit product cost for the month under variable costing?
A) $104 per unit
B) $79 per unit
C) $88 per unit
D) $95 per unit
143) Baughn Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 115
Units in beginning inventory 0
Units produced 6,600
Units sold 6,400
Units in ending inventory 200
Variable costs per unit:
Direct materials $ 26
Direct labor $ 46
Variable manufacturing overhead $ 7
Variable selling and administrative expense $ 9
Fixed costs:
Fixed manufacturing overhead $ 105,600
Fixed selling and administrative expense $ 51,200
What is the unit product cost for the month under absorption costing?
A) $79 per unit
B) $95 per unit
C) $104 per unit
D) $88 per unit
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144) Ross Corporation produces a single product. The company has direct materials costs of
$8 per unit, direct labor costs of $6 per unit, and manufacturing overhead of $10 per unit. Sixty
percent of the manufacturing overhead is for fixed costs. In addition, variable selling and
administrative expenses are $2 per unit, and fixed selling and administrative expenses are $3 per
unit at the current activity level. Assume that direct labor is a variable cost.
Under absorption costing, the unit product cost is:
A) $24 per unit
B) $20 per unit
C) $26 per unit
D) $29 per unit
145) Ross Corporation produces a single product. The company has direct materials costs of
$8 per unit, direct labor costs of $6 per unit, and manufacturing overhead of $10 per unit. Sixty
percent of the manufacturing overhead is for fixed costs. In addition, variable selling and
administrative expenses are $2 per unit, and fixed selling and administrative expenses are $3 per
unit at the current activity level. Assume that direct labor is a variable cost.
Under variable costing, the unit product cost is:
A) $24 per unit
B) $20 per unit
C) $18 per unit
D) $21 per unit
146) Columbia Corporation produces a single product. The company’s variable costing income
statement for November appears below:
Columbia Corporation
Income Statement
For the Month ended November 30
Sales ($20 per unit) $ 846,000
Variable expenses:
Variable cost of goods sold 549,900
Variable selling expense 126,900
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Total variable expenses 676,800
Contribution margin 169,200
Fixed expenses:
Manufacturing 107,880
Selling and administrative 35,960
Total fixed expenses 143,840
Net operating income $ 25,360
During November, 35,960 units were manufactured and 8,080 units were in beginning inventory.
Variable production costs per unit, total fixed manufacturing expenses, and the number of units
produced were the same in prior months.
The value of the company’s inventory on November 30 under absorption costing would be:
A) $22,620
B) $33,060
C) $27,840
D) $38,060
147) Columbia Corporation produces a single product. The company’s variable costing income
statement for November appears below:
Columbia Corporation
Income Statement
For the Month ended November 30
Sales ($30 per unit) $ 1,200,000
Variable expenses:
Variable cost of goods sold 720,000
Variable selling expense 160,000
Total variable expenses 880,000
Contribution margin 320,000
Fixed expenses:
Manufacturing 140,000
Selling and administrative 35,000
Total fixed expenses 175,000
Net operating income $ 145,000
During November, 35,000 units were manufactured and 8,000 units were in beginning inventory.
Variable production costs per unit, total fixed manufacturing expenses, and the number of units
produced were the same in prior months.
The value of the company’s inventory on November 30 under absorption costing would be:
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A) $54,000
B) $66,000
C) $78,000
D) $81,000
148) Columbia Corporation produces a single product. The company’s variable costing income
statement for November appears below:
Columbia Corporation
Income Statement
For the Month ended November 30
Sales ($19 per unit) $ 815,100
Variable expenses:
Variable cost of goods sold 429,000
Variable selling expense 128,700
Total variable expenses 557,700
Contribution margin 257,400
Fixed expenses:
Manufacturing 140,920
Selling and administrative 70,460
Total fixed expenses 211,380
Net operating income $ 46,020
During November, 35,230 units were manufactured and 8,210 units were in beginning inventory.
Variable production costs per unit, total fixed manufacturing expenses, and the number of units
produced were the same in prior months.
Under absorption costing, for November the company would report a:
A) $15,340 profit
B) $46,020 profit
C) $70,460 profit
D) $15,340 loss
149) Columbia Corporation produces a single product. The company’s variable costing income
statement for November appears below:
Columbia Corporation
Income Statement
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For the Month ended November 30
Sales ($30 per unit) $ 1,200,000
Variable expenses:
Variable cost of goods sold 720,000
Variable selling expense 160,000
Total variable expenses 880,000
Contribution margin 320,000
Fixed expenses:
Manufacturing 140,000
Selling and administrative 35,000
Total fixed expenses 175,000
Net operating income $ 145,000
During November, 35,000 units were manufactured and 8,000 units were in beginning inventory.
Variable production costs per unit, total fixed manufacturing expenses, and the number of units
produced were the same in prior months.
Under absorption costing, for November the company would report a:
A) $145,000 profit
B) $125,000 profit
C) $125,000 loss
D) $120,000 profit
150) Aaron Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 111
Units in beginning inventory 0
Units produced 6,450
Units sold 6,150
Units in ending inventory 300
Variable costs per unit:
Direct materials $ 15
Direct labor $ 45
Variable manufacturing overhead $ 9
Variable selling and administrative expense $ 9
Fixed costs:
Fixed manufacturing overhead $ 174,150
Fixed selling and administrative expense $ 24,900
What is the unit product cost for the month under variable costing?
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A) $78 per unit
B) $105 per unit
C) $96 per unit
D) $69 per unit
151) Aaron Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 90
Units in beginning inventory 0
Units produced 3,400
Units sold 3,000
Units in ending inventory 400
Variable costs per unit:
Direct materials $ 21
Direct labor $ 38
Variable manufacturing overhead $ 6
Variable selling and administrative expense $ 4
Fixed costs:
Fixed manufacturing overhead $ 54,400
Fixed selling and administrative expense $ 3,000
What is the unit product cost for the month under variable costing?
A) $69 per unit
B) $65 per unit
C) $85 per unit
D) $81 per unit
152) Aaron Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 90
Units in beginning inventory 0
Units produced 3,400
Units sold 3,000
Units in ending inventory 400
Variable costs per unit:
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Direct materials $ 21
Direct labor $ 38
Variable manufacturing overhead $ 6
Variable selling and administrative expense $ 4
Fixed costs:
Fixed manufacturing overhead $ 5 4,400
Fixed selling and administrative expense $ 3,000
What is the unit product cost for the month under absorption costing?
A) $81 per unit
B) $65 per unit
C) $85 per unit
D) $69 per unit
153) Aaron Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 101
Units in beginning inventory 0
Units produced 2,900
Units sold 2,350
Units in ending inventory 550
Variable costs per unit:
Direct materials $ 17
Direct labor $ 43
Variable manufacturing overhead $ 7
Variable selling and administrative expense $ 3
Fixed costs:
Fixed manufacturing overhead $ 54,900
Fixed selling and administrative expense $ 3,000
The total contribution margin for the month under variable costing is:
A) $14,950
B) $72,850
C) $17,950
D) $79,900
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154) Aaron Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 90
Units in beginning inventory 0
Units produced 3,400
Units sold 3,000
Units in ending inventory 400
Variable costs per unit:
Direct materials $ 21
Direct labor $ 38
Variable manufacturing overhead $ 6
Variable selling and administrative expense $ 4
Fixed costs:
Fixed manufacturing overhead $ 54,400
Fixed selling and administrative expense $ 3,000
The total contribution margin for the month under variable costing is:
A) $27,000
B) $63,000
C) $8,600
D) $75,000
155) Aaron Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 90
Units in beginning inventory 0
Units produced 3,400
Units sold 3,000
Units in ending inventory 400
Variable costs per unit:
Direct materials $ 21
Direct labor $ 38
Variable manufacturing overhead $ 6
Variable selling and administrative expense $ 4
Fixed costs:
Fixed manufacturing overhead $ 54,400
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Fixed selling and administrative expense $ 3,000
The total gross margin for the month under the absorption costing approach is:
A) $12,000
B) $59,400
C) $63,000
D) $27,000
156) Aaron Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 90
Units in beginning inventory 0
Units produced 3,400
Units sold 3,000
Units in ending inventory 400
Variable costs per unit:
Direct materials $ 21
Direct labor $ 38
Variable manufacturing overhead $ 6
Variable selling and administrative expense $ 4
Fixed costs:
Fixed manufacturing overhead $ 54,400
Fixed selling and administrative expense $ 3,000
What is the total period cost for the month under variable costing?
A) $54,400
B) $69,400
C) $57,400
D) $15,000
157) Aaron Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 90
Units in beginning inventory 0
Units produced 3,400
Units sold 3,000
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Units in ending inventory 400
Variable costs per unit:
Direct materials $ 21
Direct labor $ 38
Variable manufacturing overhead $ 6
Variable selling and administrative expense $ 4
Fixed costs:
Fixed manufacturing overhead $ 54,400
Fixed selling and administrative expense $ 3,000
What is the total period cost for the month under the absorption costing?
A) $54,400
B) $3,000
C) $69,400
D) $15,000
158) Aaron Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price 90
Units in beginning inventory 0
Units produced 3,400
Units sold 3,000
Units in ending inventory 400
Variable costs per unit:
Direct materials $ 21
Direct labor $ 38
Variable manufacturing overhead $ 6
Variable selling and administrative expense $ 4
Fixed costs:
Fixed manufacturing overhead $ 54,400
Fixed selling and administrative expense $ 3,000
What is the net operating income for the month under variable costing?
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A) $12,000
B) $(20,400)
C) $5,600
D) $6,400
159) Aaron Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 90
Units in beginning inventory 0
Units produced 3,400
Units sold 3,000
Units in ending inventory 400
Variable costs per unit:
Direct materials $ 21
Direct labor $ 38
Variable manufacturing overhead $ 6
Variable selling and administrative expense $ 4
Fixed costs:
Fixed manufacturing overhead $ 54,400
Fixed selling and administrative expense $ 3,000
What is the net operating income for the month under absorption costing?
A) $6,400
B) $12,000
C) $5,600
D) $(20,400)
160) Gabuat Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 106
Units in beginning inventory 0
Units produced 2,600
Units sold 2,200
Units in ending inventory 400
Variable costs per unit:
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Direct materials $ 46
Direct labor $ 28
Variable manufacturing overhead $ 2
Variable selling and administrative expense $ 7
Fixed costs:
Fixed manufacturing overhead $ 33,800
Fixed selling and administrative expense $ 8,800
The total contribution margin for the month under variable costing is:
A) $16,800
B) $37,400
C) $50,600
D) $66,000
161) Gabuat Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 149
Units in beginning inventory 0
Units produced 2,200
Units sold 1,910
Units in ending inventory 290
Variable costs per unit:
Direct materials $ 39
Direct labor $ 33
Variable manufacturing overhead $ 7
Variable selling and administrative expense $ 7
Fixed costs:
Fixed manufacturing overhead $ 46,200
Fixed selling and administrative expense $ 15,280
The total gross margin for the month under the absorption costing approach is:
A) $78,310
B) $93,590
C) $80,220
D) $158,530
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162) Gabuat Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 106
Units in beginning inventory 0
Units produced 2,600
Units sold 2,200
Units in ending inventory 400
Variable costs per unit:
Direct materials $ 46
Direct labor $ 28
Variable manufacturing overhead $ 2
Variable selling and administrative expense $ 7
Fixed costs:
Fixed manufacturing overhead $ 33,800
Fixed selling and administrative expense $ 8,800
The total gross margin for the month under the absorption costing approach is:
A) $73,000
B) $37,400
C) $13,200
D) $50,600
163) Gabuat Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 106
Units in beginning inventory 0
Units produced 2,600
Units sold 2,200
Units in ending inventory 400
Variable costs per unit:
Direct materials $ 46
Direct labor $ 28
Variable manufacturing overhead $ 2
Variable selling and administrative expense $ 7
Fixed costs:
Fixed manufacturing overhead $ 33,800
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Fixed selling and administrative expense $8,800
What is the total period cost for the month under variable costing?
A) $42,600
B) $33,800
C) $24,200
D) $58,000
164) Gabuat Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 106
Units in beginning inventory 0
Units produced 2,600
Units sold 2,200
Units in ending inventory 400
Variable costs per unit:
Direct materials $ 46
Direct labor $ 28
Variable manufacturing overhead $ 2
Variable selling and administrative expense $ 7
Fixed costs:
Fixed manufacturing overhead $ 33,800
Fixed selling and administrative expense $ 8,800
What is the total period cost for the month under the absorption costing?
A) $24,200
B) $8,800
C) $58,000
D) $33,800
165) Erie Corporation manufactures a single product that it sells for $35 per unit. The
company has the following cost structure:
Variable costs per unit:
Production $ 8
Selling and administrative $ 5
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Fixed costs per year:
Production $ 82,500
Selling and administrative $ 60,000
There were no units in inventory at the beginning of the year. During the year 30,000 units were
produced and 25,000 units were sold.
Under absorption costing, the unit product cost would be:
A) $8.00 per unit
B) $17.75 per unit
C) $13.00 per unit
D) $10.75 per unit
166) Erie Corporation manufactures a single product that it sells for $35 per unit. The
company has the following cost structure:
Variable costs per unit:
Production $ 8
Selling and administrative $ 5
Fixed costs per year:
Production $ 82,500
Selling and administrative $ 60,000
There were no units in inventory at the beginning of the year. During the year 30,000 units were
produced and 25,000 units were sold.
The company’s net operating income under variable costing would be:
A) $407,500
B) $421,250
C) $431,250
D) $417,500
167) Hadley Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 126
Units in beginning inventory 0
Units produced 1,900
Units sold 1,800
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Units in ending inventory 100
Variable costs per unit:
Direct materials $ 49
Direct labor $ 28
Variable manufacturing overhead $ 5
Variable selling and administrative expense $ 11
Fixed costs:
Fixed manufacturing overhead $ 32,300
Fixed selling and administrative expense $ 23,400
What is the unit product cost for the month under variable costing?
A) $99 per unit
B) $110 per unit
C) $82 per unit
D) $93 per unit
168) Hadley Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 126
Units in beginning inventory 0
Units produced 1,900
Units sold 1,800
Units in ending inventory 100
Variable costs per unit:
Direct materials $ 49
Direct labor $ 28
Variable manufacturing overhead $ 5
Variable selling and administrative expense $ 11
Fixed costs:
Fixed manufacturing overhead $ 32,300
Fixed selling and administrative expense $ 23,400
The total contribution margin for the month under variable costing is:
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A) $27,100
B) $59,400
C) $48,600
D) $79,200
169) Hadley Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 210
Units in beginning inventory 200
Units produced 1,340
Units sold 1,150
Units in ending inventory 390
Variable costs per unit:
Direct materials $ 115
Direct labor $ 37
Variable manufacturing overhead $ 12
Variable selling and administrative expense $ 13
Fixed costs:
Fixed manufacturing overhead $ 9,380
Fixed selling and administrative expense $ 19,550
What is the total period cost for the month under variable costing?
A) $34,500
B) $28,930
C) $9,380
D) $43,880
170) Hadley Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 126
Units in beginning inventory 0
Units produced 1,900
Units sold 1,800
Units in ending inventory 100
Variable costs per unit:
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Direct materials $ 49
Direct labor $ 28
Variable manufacturing overhead $ 5
Variable selling and administrative expense $ 11
Fixed costs:
Fixed manufacturing overhead $ 32,300
Fixed selling and administrative expense $ 23,400
What is the total period cost for the month under variable costing?
A) $75,500
B) $43,200
C) $55,700
D) $32,300
171) Hadley Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 126
Units in beginning inventory 0
Units produced 1,900
Units sold 1,800
Units in ending inventory 100
Variable costs per unit:
Direct materials $ 49
Direct labor $ 28
Variable manufacturing overhead $ 5
Variable selling and administrative expense $ 11
Fixed costs:
Fixed manufacturing overhead $ 32,300
Fixed selling and administrative expense $ 23,400
What is the net operating income for the month under variable costing?
A) $5,400
B) $1,700
C) $(4,500)
D) $3,700
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172) Ing Corporation, which has only one product, has provided the following data concerning
its most recent month of operations:
Selling price $ 159
Units in beginning inventory 0
Units produced 7,800
Units sold 7,700
Units in ending inventory 100
Variable costs per unit:
Direct materials $ 47
Direct labor $ 50
Variable manufacturing overhead $ 2
Variable selling and administrative expense $ 9
Fixed costs:
Fixed manufacturing overhead $ 304,200
Fixed selling and administrative expense $ 84,700
What is the unit product cost for the month under variable costing?
A) $99 per unit
B) $138 per unit
C) $108 per unit
D) $147 per unit
173) Ing Corporation, which has only one product, has provided the following data concerning
its most recent month of operations:
Selling price $ 159
Units in beginning inventory 0
Units produced 7,800
Units sold 7,700
Units in ending inventory 100
Variable costs per unit:
Direct materials $ 47
Direct labor $ 50
Variable manufacturing overhead $ 2
Variable selling and administrative expense $ 9
Fixed costs:
Fixed manufacturing overhead $ 304,200
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Fixed selling and administrative expense $ 84,700
What is the net operating income for the month under variable costing?
A) $3,800
B) $(6,100)
C) $3,900
D) $7,700
174) Beach Corporation, which produces a single product, budgeted the following costs for its
first year of operations. These costs are based on a budgeted volume of 30,000 towels produced
and sold:
Direct materials $ 96,000
Direct labor $ 48,000
Variable manufacturing overhead $ 72,000
Fixed manufacturing overhead $ 60,000
Variable selling and administrative expenses $ 12,000
Fixed selling and administrative expenses $ 36,000
During the first year of operations, Beach Corporation actually produced 30,000 towels but only
sold 24,000 towels. Actual costs did not fluctuate from the cost behavior patterns described
above. The 24,000 towels were sold for $16 per towel. Assume that direct labor is a variable
cost.
What is the total cost that would be assigned to Beach Corporation’s finished goods inventory
at the end of the first year of operations Under variable costing?
A) $43,200
B) $45,600
C) $55,200
D) $64,800
175) Beach Corporation, which produces a single product, budgeted the following costs for its
first year of operations. These costs are based on a budgeted volume of 30,000 towels produced
and sold:
Direct materials $ 96,000
Direct labor $ 48,000
Variable manufacturing overhead $ 72,000
Fixed manufacturing overhead $ 60,000
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Variable selling and administrative expenses $ 12,000
Fixed selling and administrative expenses $ 36,000
During the first year of operations, Beach Corporation actually produced 30,000 towels but only
sold 24,000 towels. Actual costs did not fluctuate from the cost behavior patterns described
above. The 24,000 towels were sold for $16 per towel. Assume that direct labor is a variable
cost.
Under absorption costing, what is Beach Corporation’s actual net operating income for its first
year?
A) $60,000
B) $115,200
C) $117,600
D) $124,800
176) Elbrege Corporation manufactures a single product. The company has supplied the
following data:
Selling price per unit $ 30
Variable costs per unit:
Production $ 7
Selling and administrative $ 4
Fixed costs per year:
Production $ 75,000
Selling and administrative $ 50,000
There was no beginning inventory. During the year 25,000 units were produced and 20,000 units
were sold.
Under absorption costing, the unit product cost would be:
A) $7 per unit
B) $16 per unit
C) $11 per unit
D) $10 per unit
177) Elbrege Corporation manufactures a single product. The company has supplied the
following data:
Selling price per unit $ 30
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Variable costs per unit:
Production $ 7
Selling and administrative $ 4
Fixed costs per year:
Production $ 75,000
Selling and administrative $ 50,000
There was no beginning inventory. During the year 25,000 units were produced and 20,000 units
were sold.
The company’s net operating income for the year under variable costing would be:
A) $255,000
B) $270,000
C) $200,000
D) $280,000
178) Elison Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 111
Units in beginning inventory 0
Units produced 7,500
Units sold 7,200
Units in ending inventory 300
Variable costs per unit:
Direct materials $ 24
Direct labor $ 34
Variable manufacturing overhead $ 1
Variable selling and administrative expense $ 5
Fixed costs:
Fixed manufacturing overhead $ 217,500
Fixed selling and administrative expense $ 115,200
What is the net operating income for the month under variable costing?
A) $8,700
B) $5,700
C) $14,400
D) $(12,000)
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179) Elison Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 111
Units in beginning inventory 0
Units produced 7,500
Units sold 7,200
Units in ending inventory 300
Variable costs per unit:
Direct materials $ 24
Direct labor $ 34
Variable manufacturing overhead $ 1
Variable selling and administrative expense $ 5
Fixed costs:
Fixed manufacturing overhead $ 217,500
Fixed selling and administrative expense $ 115,200
What is the net operating income for the month under absorption costing?
A) $8,700
B) $5,700
C) $14,400
D) $(12,000)
180) Farris Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 78
Units in beginning inventory 0
Units produced 8,800
Units sold 8,700
Units in ending inventory 100
Variable costs per unit:
Direct materials $ 18
Direct labor $ 10
Variable manufacturing overhead $ 4
Variable selling and administrative expense $ 5
Fixed costs:
Fixed manufacturing overhead $ 255,200
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Fixed selling and administrative expense $ 87,000
What is the unit product cost for the month under variable costing?
A) $61 per unit
B) $37 per unit
C) $32 per unit
D) $66 per unit
181) Farris Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 78
Units in beginning inventory 0
Units produced 8,800
Units sold 8,700
Units in ending inventory 100
Variable costs per unit:
Direct materials $ 18
Direct labor $ 10
Variable manufacturing overhead $ 4
Variable selling and administrative expense $ 5
Fixed costs:
Fixed manufacturing overhead $ 255,200
Fixed selling and administrative expense $ 87,000
What is the unit product cost for the month under absorption costing?
A) $32 per unit
B) $61 per unit
C) $37 per unit
D) $66 per unit
182) Farris Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 112
Units in beginning inventory 0
Units produced 8,950
Units sold 8,550
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Units in ending inventory 400
Variable costs per unit:
Direct materials $ 18
Direct labor $ 60
Variable manufacturing overhead $ 6
Variable selling and administrative expense $ 10
Fixed costs:
Fixed manufacturing overhead $ 134,250
Fixed selling and administrative expense $ 8,800
What is the net operating income (loss) for the month under variable costing?
A) $10,850
B) $(22,750)
C) $16,850
D) $6,000
183) Farris Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 78
Units in beginning inventory 0
Units produced 8,800
Units sold 8,700
Units in ending inventory 100
Variable costs per unit:
Direct materials $ 18
Direct labor $ 10
Variable manufacturing overhead $ 4
Variable selling and administrative expense $ 5
Fixed costs:
Fixed manufacturing overhead $ 255,200
Fixed selling and administrative expense $ 87,000
What is the net operating income for the month under variable costing?
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A) $14,500
B) $17,400
C) $11,300
D) $2,900
184) Farris 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 8,900
Units sold 8,500
Units in ending inventory 400
Variable costs per unit:
Direct materials $ 17
Direct labor $ 59
Variable manufacturing overhead $ 5
Variable selling and administrative expense $ 9
Fixed costs:
Fixed manufacturing overhead $ 133,500
Fixed selling and administrative expense $ 8,700
What is the net operating income for the month under absorption costing?
A) $21,600
B) $10,800
C) $16,800
D) $6,000
185) Farris Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 78
Units in beginning inventory 0
Units produced 8,800
Units sold 8,700
Units in ending inventory 100
Variable costs per unit:
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Direct materials $ 18
Direct labor $ 10
Variable manufacturing overhead $ 4
Variable selling and administrative expense $ 5
Fixed costs:
Fixed manufacturing overhead $ 255,200
Fixed selling and administrative expense $ 87,000
What is the net operating income for the month under absorption costing?
A) $2,900
B) $11,300
C) $17,400
D) $14,500
186) Janos Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 111
Units in beginning inventory 300
Units produced 2,000
Units sold 2,200
Units in ending inventory 100
Variable costs per unit:
Direct materials $ 29
Direct labor $ 30
Variable manufacturing overhead $ 4
Variable selling and administrative expense $ 9
Fixed costs:
Fixed manufacturing overhead $34,000
Fixed selling and administrative expense $39,600
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.
What is the unit product cost for the month under variable costing?
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A) $63 per unit
B) $80 per unit
C) $72 per unit
D) $89 per unit
187) Janos Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 111
Units in beginning inventory 300
Units produced 2,000
Units sold 2,200
Units in ending inventory 100
Variable costs per unit:
Direct materials $ 29
Direct labor $ 30
Variable manufacturing overhead $ 4
Variable selling and administrative expense $ 9
Fixed costs:
Fixed manufacturing overhead $ 34,000
Fixed selling and administrative expense $ 39,600
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.
What is the unit product cost for the month under absorption costing?
A) $80 per unit
B) $72 per unit
C) $63 per unit
D) $89 per unit
188) Janos Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 111
Units in beginning inventory 300
Units produced 2,000
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Units sold 2,200
Units in ending inventory 100
Variable costs per unit:
Direct materials $ 29
Direct labor $ 30
Variable manufacturing overhead $ 4
Variable selling and administrative expense $ 9
Fixed costs:
Fixed manufacturing overhead $ 34,000
Fixed selling and administrative expense $ 39,600
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.
What is the net operating income for the month under variable costing?
A) $8,800
B) $12,200
C) $1,700
D) $24,800
189) Janos Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 111
Units in beginning inventory 300
Units produced 2,000
Units sold 2,200
Units in ending inventory 100
Variable costs per unit:
Direct materials $ 29
Direct labor $ 30
Variable manufacturing overhead $ 4
Variable selling and administrative expense $ 9
Fixed costs:
Fixed manufacturing overhead $ 34,000
Fixed selling and administrative expense $ 39,600
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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.
What is the net operating income for the month under absorption costing?
A) $8,800
B) $24,800
C) $1,700
D) $12,200
190) Keyser Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 117
Units in beginning inventory 750
Units produced 8,650
Units sold 8,750
Units in ending inventory 650
Variable costs per unit:
Direct materials $ 25
Direct labor $ 42
Variable manufacturing overhead $ 6
Variable selling and administrative expense $ 16
Fixed costs:
Fixed manufacturing overhead $ 69,200
Fixed selling and administrative expense $ 163,000
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.
What is the net operating income for the month under variable costing?
A) $12,000
B) $12,800
C) $3,700
D) $20,100
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191) Keyser Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 118
Units in beginning inventory 400
Units produced 2,100
Units sold 2,300
Units in ending inventory 200
Variable costs per unit:
Direct materials $ 37
Direct labor $ 23
Variable manufacturing overhead $ 3
Variable selling and administrative expense $ 5
Fixed costs:
Fixed manufacturing overhead $ 73,500
Fixed selling and administrative expense $ 29,900
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.
What is the net operating income for the month under variable costing?
A) $4,600
B) $11,600
C) $24,200
D) $7,000
192) Keyser Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 137
Units in beginning inventory 1,000
Units produced 8,900
Units sold 9,000
Units in ending inventory 900
Variable costs per unit:
Direct materials $ 30
Direct labor $ 47
Variable manufacturing overhead $ 11
Variable selling and administrative expense $ 21
Fixed costs:
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Fixed manufacturing overhead $ 71,200
Fixed selling and administrative expense $ 164,500
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.
What is the net operating income for the month under absorption costing?
Noreen 5e Rechecks 2019-08-02
A) $15,500
B) $4,200
C) $16,300
D) $25,100
193) Keyser Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 118
Units in beginning inventory 400
Units produced 2,100
Units sold 2,300
Units in ending inventory 200
Variable costs per unit:
Direct materials $ 37
Direct labor $ 23
Variable manufacturing overhead $ 3
Variable selling and administrative expense $ 5
Fixed costs:
Fixed manufacturing overhead $ 73,500
Fixed selling and administrative expense $ 29,900
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.
What is the net operating income for the month under absorption costing?
A) $7,000
B) $4,600
C) $11,600
D) $24,200
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194) Wolanski Corporation has provided the following data for its most recent year of
operations:
Selling price per unit $ 48
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 11
Direct labor $ 5
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 110,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 4
Fixed selling and administrative expense per year $71,000
Units in beginning inventory 0
Units produced during the year 11,000
Units sold during the year 8,000
Units in ending inventory 3,000
The unit product cost under absorption costing is closest to:
A) $21.00
B) $31.00
C) $35.00
D) $10.00
195) Wolanski Corporation has provided the following data for its most recent year of
operations:
Selling price per unit $ 48
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 11
Direct labor $ 5
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 110,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 4
Version 1 106
Fixed selling and administrative expense per year $71,000
Units in beginning inventory 0
Units produced during the year 11,000
Units sold during the year 8,000
Units in ending inventory 3,000
The unit product cost under variable costing is closest to:
A) $21.00
B) $31.00
C) $35.00
D) $25.00
196) Wolanski Corporation has provided the following data for its most recent year of
operations:
Selling price per unit $ 48
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 11
Direct labor $ 5
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 110,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 4
Fixed selling and administrative expense per year $71,000
Units in beginning inventory 0
Units produced during the year 11,000
Units sold during the year 8,000
Units in ending inventory 3,000
The net operating income (loss) under absorption costing is closest to:
Garrison 17e Rechecks 2020-13-10
A) $104,000
B) $33,000
C) $3,000
D) $136,000
Version 1 107
197) Wolanski Corporation has provided the following data for its most recent year of
operations:
Selling price per unit $ 48
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 11
Direct labor $ 5
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 110,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 4
Fixed selling and administrative expense per year $71,000
Units in beginning inventory 0
Units produced during the year 11,000
Units sold during the year 8,000
Units in ending inventory 3,000
The net operating income (loss) under variable costing is closest to:
A) $184,000
B) $216,000
C) $3,000
D) $33,000
198) Wolanski Corporation has provided the following data for its most recent year of
operations:
Selling price per unit $ 48
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 11
Direct labor $ 5
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 110,000
Selling and administrative expenses:
Version 1 108
Variable selling and administrative expense per unit sold $ 4
Fixed selling and administrative expense per year $ 71,000
Units in beginning inventory 0
Units produced during the year 11,000
Units sold during the year 8,000
Units in ending inventory 3,000
Which of the following statements is true?
A) The amount of fixed manufacturing overhead released from inventories is $30,000
B) The amount of fixed manufacturing overhead released from inventories is $248,000
C) The amount of fixed manufacturing overhead deferred in inventories is $30,000
D) The amount of fixed manufacturing overhead deferred in inventories is $248,000
199) Bryans Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 53
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 6
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 63,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 4
Fixed selling and administrative expense per year $ 71,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 9,000 7,000
Units sold during the year 6,000 7,000
Units in ending inventory 3,000 3,000
The unit product cost under absorption costing in Year 1 is closest to:
A) $35.00
B) $31.00
C) $7.00
D) $24.00
Version 1 109
200) Bryans Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 53
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 6
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 63,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 4
Fixed selling and administrative expense per year $ 71,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 9,000 7,000
Units sold during the year 6,000 7,000
Units in ending inventory 3,000 3,000
The unit product cost under absorption costing in Year 2 is closest to:
A) $33.00
B) $9.00
C) $24.00
D) $37.00
201) Bryans Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 53
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 6
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 63,000
Selling and administrative expenses:
Version 1 110
Variable selling and administrative expense per unit sold $ 4
Fixed selling and administrative expense per year $ 71,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 9,000 7,000
Units sold during the year 6,000 7,000
Units in ending inventory 3,000 3,0000
The unit product cost under variable costing in Year 1 is closest to:
A) $35.00
B) $24.00
C) $31.00
D) $28.00
202) Bryans Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 53
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 6
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 63,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 4
Fixed selling and administrative expense per year $ 71,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 9,000 7,000
Units sold during the year 6,000 7,000
Units in ending inventory 3,000 3,000
The net operating income (loss) under absorption costing in Year 1 is closest to:
A) $37,000
B) $132,000
C) $108,000
D) $16,000
Version 1 111
203) Bryans Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 53
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 6
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 63,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 4
Fixed selling and administrative expense per year $ 71,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 9,000 7,000
Units sold during the year 6,000 7,000
Units in ending inventory 3,000 3,000
The net operating income (loss) under absorption costing in Year 2 is closest to:
A) $146,000
B) $118,000
C) $47,000
D) $41,000
204) Bryans Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 53
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 6
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 63,000
Selling and administrative expenses:
Version 1 112
Variable selling and administrative expense per unit sold $ 4
Fixed selling and administrative expense per year $ 71,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 9,000 7,000
Units sold during the year 6,000 7,000
Units in ending inventory 3,000 3,000
The net operating income (loss) under variable costing in Year 1 is closest to:
A) $174,000
B) $37,000
C) $150,000
D) $16,000
205) Bryans Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 53
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 6
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 63,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 4
Fixed selling and administrative expense per year $ 71,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 9,000 7,000
Units sold during the year 6,000 7,000
Units in ending inventory 3,000 3,000
The net operating income (loss) under variable costing in Year 2 is closest to:
A) $41,000
B) $203,000
C) $175,000
D) $47,000
Version 1 113
206) Plummer Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 44
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 9
Direct labor $ 6
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 63,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 66,000
Year 1 Year 2
Units in beginning inventory 0 2,000
Units produced during the year 9,000 7,000
Units sold during the year 7,000 8,000
Units in ending inventory 2,000 1,000
The unit product cost under absorption costing in Year 2 is closest to:
A) $9.00
B) $19.00
C) $28.00
D) $33.00
207) Plummer Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 44
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 9
Direct labor $ 6
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 63,000
Selling and administrative expenses:
Version 1 114
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 66,000
Year 1 Year 2
Units in beginning inventory 0 2,000
Units produced during the year 9,000 7,000
Units sold during the year 7,000 8,000
Units in ending inventory 2,000 1,000
The unit product cost under variable costing in Year 1 is closest to:
A) $19.00
B) $24.00
C) $26.00
D) $31.00
208) Plummer Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 44
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 9
Direct labor $ 6
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 63,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 66,000
Year 1 Year 2
Units in beginning inventory 0 2,000
Units produced during the year 9,000 7,000
Units sold during the year 7,000 8,000
Units in ending inventory 2,000 1,000
The net operating income (loss) under absorption costing in Year 2 is closest to:
A) $31,000
B) $26,000
C) $132,000
D) $92,000
Version 1 115
209) Plummer Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 44
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 9
Direct labor $ 6
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 63,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 66,000
Year 1 Year 2
Units in beginning inventory 0 2,000
Units produced during the year 9,000 7,000
Units sold during the year 7,000 8,000
Units in ending inventory 2,000 1,000
The net operating income (loss) under variable costing in Year 2 is closest to:
Garrison 17e Rechecks 2020-13-10
A) $31,000
B) $160,000
C) $200,000
D) $26,000
210) Neef Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 84
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 12
Direct labor $ 5
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 432,000
Selling and administrative expenses:
Version 1 116
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 61,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 12,000 9,000
Units sold during the year 9,000 10,000
Units in ending inventory 3,000 2,000
The unit product cost under absorption costing in Year 1 is closest to:
A) $36.00
B) $21.00
C) $57.00
D) $62.00
211) Neef Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 84
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 12
Direct labor $ 5
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 432,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 61,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 12,000 9,000
Units sold during the year 9,000 10,000
Units in ending inventory 3,000 2,000
The unit product cost under absorption costing in Year 2 is closest to:
A) $48.00
B) $21.00
C) $74.00
D) $69.00
Version 1 117
212) Neef Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 84
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 12
Direct labor $ 5
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 432,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 61,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 12,000 9,000
Units sold during the year 9,000 10,000
Units in ending inventory 3,000 2,000
The unit product cost under variable costing in Year 1 is closest to:
A) $21.00
B) $57.00
C) $62.00
D) $26.00
213) Neef Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 84
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 12
Direct labor $ 5
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 432,000
Selling and administrative expenses:
Version 1 118
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 61,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 12,000 9,000
Units sold during the year 9,000 10,000
Units in ending inventory 3,000 2,000
The net operating income (loss) under absorption costing in Year 1 is closest to:
A) $137,000
B) $198,000
C) $29,000
D) $243,000
214) Neef Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 84
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 12
Direct labor $ 5
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 432,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 61,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 12,000 9,000
Units sold during the year 9,000 10,000
Units in ending inventory 3,000 2,000
The net operating income (loss) under absorption costing in Year 2 is closest to:
A) $87,000
B) $136,000
C) $75,000
D) $186,000
Version 1 119
215) Neef Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 84
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 12
Direct labor $ 5
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 432,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 61,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 12,000 9,000
Units sold during the year 9,000 10,000
Units in ending inventory 3,000 2,000
The net operating income (loss) under variable costing in Year 1 is closest to:
A) $522,000
B) $567,000
C) $137,000
D) $29,000
216) Neef Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 84
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 12
Direct labor $ 5
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 432,000
Selling and administrative expenses:
Version 1 120
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 61,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 12,000 9,000
Units sold during the year 9,000 10,000
Units in ending inventory 3,000 2,000
The net operating income (loss) under variable costing in Year 2 is closest to:
A) $630,000
B) $75,000
C) $87,000
D) $580,000
217) Neef Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 84
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 12
Direct labor $ 5
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 432,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 61,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 12,000 9,000
Units sold during the year 9,000 10,000
Units in ending inventory 3,000 2,000
Which of the following statements is true for Year 1?
A) The amount of fixed manufacturing overhead released from inventories is $108,000
B) The amount of fixed manufacturing overhead deferred in inventories is $513,000
C) The amount of fixed manufacturing overhead released from inventories is $513,000
D) The amount of fixed manufacturing overhead deferred in inventories is $108,000
Version 1 121
218) Neef Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 84
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 12
Direct labor $ 5
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 432,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 61,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 12,000 9,000
Units sold during the year 9,000 10,000
Units in ending inventory 3,000 2,000
Which of the following statements is true for Year 2?
A) The amount of fixed manufacturing overhead released from inventories is $12,000
B) The amount of fixed manufacturing overhead released from inventories is $654,000
C) The amount of fixed manufacturing overhead deferred in inventories is $12,000
D) The amount of fixed manufacturing overhead deferred in inventories is $654,000
219) The Southern Corporation manufactures a single product and has the following cost
structure:
Variable costs per unit:
Production $ 38
Selling and administrative $ 14
Fixed costs per year:
Production $ 140,000
Selling and administrative $ 84,000
Version 1 122
Last year, 7,000 units were produced and 6,800 units were sold. There was no beginning
inventory.
Under variable costing, the unit product cost would be:
Garrison 17e Rechecks 2020-13-10
A) $38 per unit
B) $52 per unit
C) $58 per unit
D) $70 per unit
220) The Southern Corporation manufactures a single product and has the following cost
structure:
Variable costs per unit:
Production $ 32
Selling and administrative $ 13
Fixed costs per year:
Production $ 98,770
Selling and administrative $ 86,920
Last year, 5,810 units were produced and 5,610 units were sold. There was no beginning
inventory.
The carrying value on the balance sheet of the ending inventory of finished goods under
variable costing would be:
A) the same as absorption costing.
B) $5,610 greater than under absorption costing.
C) $5,610 less than under absorption costing.
D) $3,400 less than under absorption costing.
221) The Southern Corporation manufactures a single product and has the following cost
structure:
Variable costs per unit:
Production $ 38
Selling and administrative $ 14
Fixed costs per year:
Version 1 123
Production $ 140,000
Selling and administrative $ 84,000
Last year, 7,000 units were produced and 6,800 units were sold. There was no beginning
inventory.
The carrying value on the balance sheet of the ending inventory of finished goods under
variable costing would be:
Garrison 17e Rechecks 2020-13-10
A) the same as absorption costing.
B) $6,800 greater than under absorption costing.
C) $6,800 less than under absorption costing.
D) $4,000 less than under absorption costing.
222) The Southern Corporation manufactures a single product and has the following cost
structure:
Variable costs per unit:
Production $ 38
Selling and administrative $ 14
Fixed costs per year:
Production $ 140,000
Selling and administrative $ 84,000
Last year, 7,000 units were produced and 6,800 units were sold. There was no beginning
inventory.
Under absorption costing, the cost of goods sold for the year would be:
Garrison 17e Rechecks 2020-13-10
A) $258,400
B) $394,400
C) $353,600
D) $398,400
223) Baraban Corporation has provided the following data for its most recent year of
operation:
Selling price per unit $ 47
Manufacturing costs:
Version 1 124
Variable manufacturing cost per unit produced:
Direct materials $ 10
Direct labor $ 6
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 130,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 63,000
Units in beginning inventory 0
Units produced during the year 10,000
Units sold during the year 9,000
Units in ending inventory 1,000
The unit product cost under absorption costing is closest to:
A) $39.00
B) $21.00
C) $34.00
D) $13.00
224) Baraban Corporation has provided the following data for its most recent year of
operation:
Selling price per unit $ 47
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 10
Direct labor $ 6
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 130,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 63,000
Units in beginning inventory 0
Units produced during the year 10,000
Units sold during the year 9,000
Units in ending inventory 1,000
The unit product cost under variable costing is closest to:
Version 1 125
A) $34.00
B) $39.00
C) $21.00
D) $26.00
225) Baraban Corporation has provided the following data for its most recent year of
operation:
Selling price per unit $ 47
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 10
Direct labor $ 6
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 130,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 63,000
Units in beginning inventory 0
Units produced during the year 10,000
Units sold during the year 9,000
Units in ending inventory 1,000
The net operating income (loss) under absorption costing closest to:
A) ($4,000)
B) $9,000
C) $117,000
D) $72,000
226) Baraban Corporation has provided the following data for its most recent year of
operation:
Selling price per unit $ 47
Manufacturing costs:
Version 1 126
Variable manufacturing cost per unit produced:
Direct materials $ 10
Direct labor $ 6
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $130,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 63,000
Units in beginning inventory 0
Units produced during the year 10,000
Units sold during the year 9,000
Units in ending inventory 1,000
The net operating income (loss) under variable costing is closest to:
A) $234,000
B) $9,000
C) ($4,000)
D) $189,000
227) Smidt Corporation has provided the following data for its two most recent years of
operation:
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 9
Direct labor $ 5
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 140,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 65,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 10,000 7,000
Units sold during the year 7,000 6,000
Units in ending inventory 3,000 4,000
The unit product cost under absorption costing in Year 1 is closest to:
Version 1 127
A) $19.00
B) $14.00
C) $33.00
D) $38.00
228) Smidt Corporation has provided the following data for its two most recent years of
operation:
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 9
Direct labor $ 5
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 140,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 65,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 10,000 7,000
Units sold during the year 7,000 6,000
Units in ending inventory 3,000 4,000
The unit product cost under absorption costing in Year 2 is closest to:
A) $19.00
B) $44.00
C) $20.00
D) $39.00
229) Smidt Corporation has provided the following data for its two most recent years of
operation:
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 9
Version 1 128
Direct labor $ 5
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 140,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 65,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 10,000 7,000
Units sold during the year 7,000 6,000
Units in ending inventory 3,000 4,000
The unit product cost under variable costing in Year 1 is closest to:
A) $24.00
B) $33.00
C) $19.00
D) $38.00
230) Tustin Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 68
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 10
Direct labor $ 6
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 220,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 6
Fixed selling and administrative expense per year $ 61,000
Year 1 Year 2
Units in beginning inventory 0 1,000
Units produced during the year 11,000 10,000
Units sold during the year 10,000 7,000
Units in ending inventory 1,000 4,000
The unit product cost under absorption costing in Year 2 is closest to:
Version 1 129
A) $48.00
B) $22.00
C) $20.00
D) $42.00
231) Tustin Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 68
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 10
Direct labor $ 6
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 220,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 6
Fixed selling and administrative expense per year $ 61,000
Year 1 Year 2
Units in beginning inventory 0 1,000
Units produced during the year 11,000 10,000
Units sold during the year 10,000 7,000
Units in ending inventory 1,000 4,000
The unit product cost under variable costing in Year 1 is closest to:
A) $20.00
B) $26.00
C) $46.00
D) $40.00
232) Tustin Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 68
Manufacturing costs:
Version 1 130
Variable manufacturing cost per unit produced:
Direct materials $ 10
Direct labor $ 6
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 220,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 6
Fixed selling and administrative expense per year $ 61,000
Year 1 Year 2
Units in beginning inventory 0 1,000
Units produced during the year 11,000 10,000
Units sold during the year 10,000 7,000
Units in ending inventory 1,000 4,000
The net operating income (loss) under absorption costing in Year 2 is closest to:
A) $81,000
B) $13,000
C) $184,000
D) $142,000
233) Tustin Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 68
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 10
Direct labor $ 6
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 220,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 6
Fixed selling and administrative expense per year $ 61,000
Year 1 Year 2
Units in beginning inventory 0 1,000
Units produced during the year 11,000 10,000
Units sold during the year 10,000 7,000
Units in ending inventory 1,000 4,000
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The net operating income (loss) under variable costing in Year 1 is closest to:
A) $420,000
B) $480,000
C) $139,000
D) $159,000
234) Mandato Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 50
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 10
Direct labor $ 6
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 72,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 70,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 9,000 8,000
Units sold during the year 6,000 9,000
Units in ending inventory 3,000 2,000
The net operating income (loss) under absorption costing in Year 1 is closest to:
A) $126,000
B) $96,000
C) $26,000
D) $2,000
235) Mandato Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 50
Manufacturing costs:
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Variable manufacturing cost per unit produced:
Direct materials $ 10
Direct labor $ 6
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 72,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 70,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 9,000 8,000
Units sold during the year 6,000 9,000
Units in ending inventory 3,000 2,000
The net operating income (loss) under absorption costing in Year 2 is closest to:
A) $74,000
B) $183,000
C) $68,000
D) $138,000
236) Mandato Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 50
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 10
Direct labor $ 6
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 72,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 70,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 9,000 8,000
Units sold during the year 6,000 9,000
Units in ending inventory 3,000 2,000
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The net operating income (loss) under variable costing in Year 1 is closest to:
A) $144,000
B) $2,000
C) $26,000
D) $174,000
237) Mandato Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 50
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 10
Direct labor $ 6
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 72,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 70,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 9,000 8,000
Units sold during the year 6,000 9,000
Units in ending inventory 3,000 2,000
The net operating income (loss) under variable costing in Year 2 is closest to:
A) $74,000
B) $216,000
C) $261,000
D) $68,000
238) Pavelko Corporation has provided the following data for its two most recent years of
operation:
Manufacturing costs:
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Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 5
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 90,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 6
Fixed selling and administrative expense per year $ 61,000
Year 1 Year 2
Units in beginning inventory 0 1,000
Units produced during the year 10,000 9,000
Units sold during the year 9,000 8,000
Units in ending inventory 1,000 2,000
The unit product cost under absorption costing in Year 1 is closest to:
A) $38.00
B) $32.00
C) $23.00
D) $9.00
239) Pavelko Corporation has provided the following data for its two most recent years of
operation:
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 5
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 90,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 6
Fixed selling and administrative expense per year $ 61,000
Year 1 Year 2
Units in beginning inventory 0 1,000
Units produced during the year 10,000 9,000
Units sold during the year 9,000 8,000
Units in ending inventory 1,000 2,000
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The unit product cost under variable costing in Year 2 is closest to:
A) $23.00
B) $38.00
C) $32.00
D) $29.00
240) Lenart Corporation has provided the following data for its two most recent years of
operation:
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 6
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 70,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 6
Fixed selling and administrative expense per year $ 83,000
Year 1 Year 2
Units in beginning inventory 0 1,000
Units produced during the year 10,000 7,000
Units sold during the year 9,000 6,000
Units in ending inventory 1,000 2,000
The unit product cost under absorption costing in Year 2 is closest to:
A) $39.00
B) $23.00
C) $10.00
D) $33.00
241) Lenart Corporation has provided the following data for its two most recent years of
operation:
Manufacturing costs:
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Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 6
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $ 70,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 6
Fixed selling and administrative expense per year $83,000
Year 1 Year 2
Units in beginning inventory 0 1,000
Units produced during the year 10,000 7,000
Units sold during the year 9,000 6,000
Units in ending inventory 1,000 2,000
The unit product cost under variable costing in Year 1 is closest to:
A) $29.00
B) $30.00
C) $23.00
D) $36.00
242) Cahalane Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 91
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 12
Direct labor $ 5
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 432,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 4
Fixed selling and administrative expense per year $ 78,000
Year 1 Year 2
Units in beginning inventory 0 1,000
Units produced during the year 9,000 12,000
Units sold during the year 8,000 10,000
Units in ending inventory 1,000 3,000
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Which of the following statements is true for Year 1?
A) The amount of fixed manufacturing overhead deferred in inventories is $48,000
B) The amount of fixed manufacturing overhead released from inventories is $560,000
C) The amount of fixed manufacturing overhead deferred in inventories is $560,000
D) The amount of fixed manufacturing overhead released from inventories is $48,000
243) Cahalane Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 91
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 12
Direct labor $ 5
Variable manufacturing overhead $ 5
Fixed manufacturing overhead per year $ 432,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 4
Fixed selling and administrative expense per year $ 78,000
Year 1 Year 2
Units in beginning inventory 0 1,000
Units produced during the year 9,000 12,000
Units sold during the year 8,000 10,000
Units in ending inventory 1,000 3,000
Which of the following statements is true for Year 2
A) The amount of fixed manufacturing overhead deferred in inventories is $60,000
B) The amount of fixed manufacturing overhead released from inventories is $60,000
C) The amount of fixed manufacturing overhead deferred in inventories is $592,000
D) The amount of fixed manufacturing overhead released from inventories is $592,000
244) Moskowitz Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 91
Manufacturing costs:
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Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 7
Variable manufacturing overhead $ 3
Fixed manufacturing overhead per year $ 480,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 6
Fixed selling and administrative expense per year $ 84,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 12,000 10,000
Units sold during the year 9,000 10,000
Units in ending inventory 3,000 3,000
The unit product cost under absorption costing in Year 2 is closest to:
A) $77.00
B) $48.00
C) $23.00
D) $71.00
245) Moskowitz Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 91
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 7
Variable manufacturing overhead $ 3
Fixed manufacturing overhead per year $ 480,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 6
Fixed selling and administrative expense per year $ 84,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 12,000 10,000
Units sold during the year 9,000 10,000
Units in ending inventory 3,000 3,000
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The unit product cost under variable costing in Year 1 is closest to:
A) $63.00
B) $69.00
C) $23.00
D) $29.00
246) Moskowitz Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 91
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 7
Variable manufacturing overhead $ 3
Fixed manufacturing overhead per year $ 480,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 6
Fixed selling and administrative expense per year $ 84,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 12,000 10,000
Units sold during the year 9,000 10,000
Units in ending inventory 3,000 3,000
The net operating income (loss) under absorption costing in Year 2 is closest to:
A) $56,000
B) $224,000
C) $80,000
D) $164,000
247) Moskowitz Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 91
Manufacturing costs:
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Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 7
Variable manufacturing overhead $ 3
Fixed manufacturing overhead per year $ 480,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 6
Fixed selling and administrative expense per year $ 84,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 12,000 10,000
Units sold during the year 9,000 10,000
Units in ending inventory 3,000 3,000
The net operating income (loss) under variable costing in Year 2 is closest to:
A) $80,000
B) $680,000
C) $620,000
D) $56,000
248) Moskowitz Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit $ 91
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 13
Direct labor $ 7
Variable manufacturing overhead $ 3
Fixed manufacturing overhead per year $ 480,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 6
Fixed selling and administrative expense per year $ 84,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced during the year 12,000 10,000
Units sold during the year 9,000 10,000
Units in ending inventory 3,000 3,000
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Which of the following statements is true for Year 2?
A) The amount of fixed manufacturing overhead released from inventories is $686,000
B) The amount of fixed manufacturing overhead released from inventories is $24,000
C) The amount of fixed manufacturing overhead deferred in inventories is $686,000
D) The amount of fixed manufacturing overhead deferred in inventories is $24,000
249) Krepps Corporation produces a single product. Last year, Krepps manufactured 26,030
units and sold 20,700 units. Production costs for the year were as follows:
Direct materials 192,622
Direct labor 143,165
Variable manufacturing overhead 210,843
Fixed manufacturing overhead 494,570
Sales totaled $983,250 for the year, variable selling and administrative expenses totaled
$120,060, and fixed selling and administrative expenses totaled $161,386. There was no
beginning inventory. Assume that direct labor is a variable cost.
The contribution margin per unit was:
A) $16.20 per unit
B) $20.70 per unit
C) $21.80 per unit
D) $26.50 per unit
250) Krepps Corporation produces a single product. Last year, Krepps manufactured 20,000
units and sold 15,000 units. Production costs for the year were as follows:
Direct materials $ 170,000
Direct labor $ 110,000
Variable manufacturing overhead $ 200,000
Fixed manufacturing overhead $ 240,000
Sales totaled $825,000 for the year, variable selling and administrative expenses totaled
$108,000, and fixed selling and administrative expenses totaled $165,000. There was no
beginning inventory. Assume that direct labor is a variable cost.
The contribution margin per unit was:
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A) $23.80 per unit
B) $31.00 per unit
C) $25.60 per unit
D) $19.00 per unit
251) Krepps Corporation produces a single product. Last year, Krepps manufactured 29,010
units and sold 23,900 units. Production costs for the year were as follows:
Direct materials $ 214,674
Direct labor $ 121,842
Variable manufacturing overhead $ 243,684
Fixed manufacturing overhead $ 319,110
Sales totaled $1,159,150 for the year, variable selling and administrative expenses totaled
$126,670, and fixed selling and administrative expenses totaled $205,971. There was no
beginning inventory. Assume that direct labor is a variable cost.
Under absorption costing, the ending inventory for the year would be valued at:
A) $219,910
B) $185,910
C) $158,410
D) $228,410
252) Krepps Corporation produces a single product. Last year, Krepps manufactured 20,000
units and sold 15,000 units. Production costs for the year were as follows:
Direct materials $ 170,000
Direct labor $ 110,000
Variable manufacturing overhead $ 200,000
Fixed manufacturing overhead $ 240,000
Sales totaled $825,000 for the year, variable selling and administrative expenses totaled
$108,000, and fixed selling and administrative expenses totaled $165,000. There was no
beginning inventory. Assume that direct labor is a variable cost.
Under absorption costing, the ending inventory for the year would be valued at:
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A) $0
B) $216,000
C) $248,250
D) $180,000
253) Krepps Corporation produces a single product. Last year, Krepps manufactured 33,100
units and sold 27,800 units. Production costs for the year were as follows:
Direct materials $ 248,250
Direct labor $ 145,640
Variable manufacturing overhead $ 274,730
Fixed manufacturing overhead $ 595,800
Sales totaled $1,320,500 for the year, variable selling and administrative expenses totaled
$164,020, and fixed selling and administrative expenses totaled $205,220. There was no
beginning inventory. Assume that direct labor is a variable cost.
Under variable costing, the company’s net operating income for the year would be:
A) $26,500 lower than under absorption costing.
B) $26,500 higher than under absorption costing.
C) $95,400 lower than under absorption costing.
D) $95,400 higher than under absorption costing.
254) Krepps Corporation produces a single product. Last year, Krepps manufactured 20,000
units and sold 15,000 units. Production costs for the year were as follows:
Direct materials $ 170,000
Direct labor $ 110,000
Variable manufacturing overhead $ 200,000
Fixed manufacturing overhead $ 240,000
Sales totaled $825,000 for the year, variable selling and administrative expenses totaled
$108,000, and fixed selling and administrative expenses totaled $165,000. There was no
beginning inventory. Assume that direct labor is a variable cost.
Under variable costing, the company’s net operating income for the year would be:
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A) $101,250 lower than under absorption costing.
B) $60,000 lower than under absorption costing.
C) $101,250 higher than under absorption costing.
D) $60,000 higher than under absorption costing.
255) Kern Corporation produces a single product. Selected information concerning the
operations of the company follow:
Units in beginning inventory 0
Units produced 10,000
Units sold 9,000
Direct materials $ 40,000
Direct labor $ 20,000
Variable manufacturing overhead $ 12,000
Fixed manufacturing overhead $ 25,000
Variable selling and administrative expenses $ 4,500
Fixed selling and administrative expenses $ 30,000
Assume that direct labor is a variable cost.
Under absorption costing, the value of the ending finished goods inventory would be:
A) $7,200
B) $7,650
C) $8,000
D) $9,700
256) Kern Corporation produces a single product. Selected information concerning the
operations of the company follow:
Units in beginning inventory 0
Units produced 10,000
Units sold 9,000
Direct materials $ 40,000
Direct labor $ 20,000
Variable manufacturing overhead $ 12,000
Fixed manufacturing overhead $ 25,000
Variable selling and administrative expenses $ 4,500
Fixed selling and administrative expenses $ 30,000
Version 1 145
Assume that direct labor is a variable cost.
Which costing method, absorption or variable costing, would show a higher operating income
for the year and by what amount?
A) Absorption costing net operating income would be higher than variable costing net
operating income by $2,500.
B) Variable costing net operating income would be higher than absorption costing net
operating income by $2,500.
C) Absorption costing net operating income would be higher than variable costing net
operating income by $5,500.
D) Variable costing net operating income would be higher than absorption costing net
operating income by $5,500.
257) Clemeson Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 145
Units in beginning inventory 0
Units produced 3,600
Units sold 3,400
Units in ending inventory 200
Variable costs per unit:
Direct materials $ 36
Direct labor $ 57
Variable manufacturing overhead $ 3
Variable selling and administrative expenses $ 5
Fixed costs:
Fixed manufacturing overhead $ 79,200
Fixed selling and administrative expense $ 64,600
The total contribution margin for the month under variable costing is:
A) $70,400
B) $149,600
C) $166,600
D) $91,800
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258) Clemeson Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price $ 145
Units in beginning inventory 0
Units produced 3,600
Units sold 3,400
Units in ending inventory 200
Variable costs per unit:
Direct materials $ 36
Direct labor $ 57
Variable manufacturing overhead $ 3
Variable selling and administrative expenses $ 5
Fixed costs:
Fixed manufacturing overhead $ 79,200
Fixed selling and administrative expense $ 64,600
The total gross margin for the month under the absorption costing approach is:
A) $149,600
B) $10,200
C) $115,400
D) $91,800
259) McCoy Corporation manufactures a computer monitor. Shown below is McCoy’s cost
structure:
Variable cost per monitor Total fixed cost for the year
Manufacturing cost $ 75.20 $ 912,000
Selling and administrative $ 14.60 $ 456,000
In its first year of operations, McCoy produced 100,000 monitors but only sold 95,000. McCoy’s
gross margin in this first year was $2,629,600. McCoy’s contribution margin in this first year was
$2,109,000.
Under variable costing, what is McCoy’s net operating income for its first year?
A) $266,000
B) $741,000
C) $1,261,600
D) $2,173,600
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260) McCoy Corporation manufactures a computer monitor. Shown below is McCoy’s cost
structure:
Variable cost per monitor Total fixed cost for the year
Manufacturing cost $ 75.20 $ 912,000
Selling and administrative $ 14.60 $ 456,000
In its first year of operations, McCoy produced 100,000 monitors but only sold 95,000. McCoy’s
gross margin in this first year was $2,629,600. McCoy’s contribution margin in this first year was
$2,109,000.
Under absorption costing, what is McCoy’s net operating income for its first year?
Garrison 17e Rechecks 2020-13-10
A) $266,000
B) $786,600
C) $1,261,600
D) $2,173,600
261) Danahy 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 $ 52,000
Variable costing net operating income, this year $ 68,000
Fixed manufacturing overhead costs released from inventory under
absorption costing, last year $ 4,000
Fixed manufacturing overhead costs deferred in inventory under
absorption costing, this year $ 6,000
What was the absorption costing net operating income last year?
A) $50,000
B) $48,000
C) $52,000
D) $56,000
262) Danahy 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 $ 52,000
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Variable costing net operating income, this year $ 68,000
Fixed manufacturing overhead costs released from inventory under
absorption costing, last year $ 4,000
Fixed manufacturing overhead costs deferred in inventory under
absorption costing, this year $ 6,000
What was the absorption costing net operating income this year?
A) $62,000
B) $74,000
C) $70,000
D) $66,000
263) Helmers Corporation manufactures a single product. Variable costing net operating
income last year was $74,000 and this year was $88,700. Last year, $27,600 in fixed
manufacturing overhead costs were released from inventory under absorption costing. This year,
$10,400 in fixed manufacturing overhead costs were deferred in inventory under absorption
costing.
What was the absorption costing net operating income last year?
A) $78,300
B) $74,000
C) $46,400
D) $101,600
264) Helmers Corporation manufactures a single product. Variable costing net operating
income last year was $86,000 and this year was $103,000. Last year, $32,000 in fixed
manufacturing overhead costs were released from inventory under absorption costing. This year,
$12,000 in fixed manufacturing overhead costs were deferred in inventory under absorption
costing.
What was the absorption costing net operating income last year?
A) $106,000
B) $86,000
C) $54,000
D) $118,000
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265) Helmers Corporation manufactures a single product. Variable costing net operating
income last year was $86,000 and this year was $103,000. Last year, $32,000 in fixed
manufacturing overhead costs were released from inventory under absorption costing. This year,
$12,000 in fixed manufacturing overhead costs were deferred in inventory under absorption
costing.
What was the absorption costing net operating income this year?
A) $81,000
B) $83,000
C) $115,000
D) $123,000
266) Norenberg 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 $ 88,600
Variable costing net operating income, this year $ 96,100
Beginning inventory, last year 0 units
Ending inventory, last year 3,600 units
Ending inventory, this year 1,300 units
Fixed manufacturing overhead cost per unit this year and last year
$ 7 per unit
What was the absorption costing net operating income last year?
A) $113,800
B) $88,600
C) $94,400
D) $76,700
267) Norenberg 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 $ 88,600
Variable costing net operating income, this year $ 96,100
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Beginning inventory, last year 0 units
Ending inventory, last year 3,600 units
Ending inventory, this year 1,300 units
Fixed manufacturing overhead cost per unit this year and last year
$ 7 per unit
What was the absorption costing net operating income this year?
A) $80,000
B) $100,500
C) $108,000
D) $112,200
268) Azuki Corporation operates in two sales territories, Urban and Rural. Data concerning
last year’s operations appear below:
Urban Rural
Sales $ 320,000 $ 80,000
Variable expenses 208,000 56,000
Contribution margin 112,000 24,000
Traceable fixed expenses 48,000 30,000
Segment margin $ 64,000 $ (6,000)
Azuki’s common fixed expenses were $25,000 last year.
What was Azuki Corporation’s overall net operating income for last year?
A) $33,000
B) $45,000
C) $58,000
D) $83,000
269) Azuki Corporation operates in two sales territories, Urban and Rural. Data concerning
last year’s operations appear below:
Urban Rural
Sales $ 320,000 $ 80,000
Variable expenses 208,000 56,000
Contribution margin 112,000 24,000
Traceable fixed expenses 48,000 30,000
Segment margin $ 64,000 $ (6,000)
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Azuki’s common fixed expenses were $25,000 last year.
If Urban sales were 10% higher last year, by approximately how much would Azuki’s net
operating income have increased? (Assume no change in selling prices, unit variable expenses,
or total fixed expenses.)
A) $4,400
B) $6,400
C) $11,200
D) $32,000
270) Azuki Corporation operates in two sales territories, Urban and Rural. Data concerning
last year’s operations appear below:
Urban Rural
Sales $ 320,000 $ 80,000
Variable expenses 208,000 56,000
Contribution margin 112,000 24,000
Traceable fixed expenses 48,000 30,000
Segment margin $ 64,000 $ (6,000)
Azuki’s common fixed expenses were $25,000 last year.
If operations in the Rural Sales Territory would have been discontinued at the beginning of last
year, how would this have changed the net operating income of Azuki Corporation as a whole?
A) $5,000 increase
B) $6,000 increase
C) $11,000 increase
D) $24,000 decrease
271) Nantor 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 $ 5,100,000 $ 3,160,000 $ 1,940,000
Contribution margin $ 2,200,000 $ 1,380,000 $ 820,000
Divisional segment margin $ 1,180,000 $ 920,000 $ 260,000
Net operating income last year for Nantor Corporation was $510,000.
In last year’s income statement segmented by division, what were Nantor’s total common fixed
expenses?
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A) $670,000
B) $1,020,000
C) $1,690,000
D) $1,850,000
272) Nantor 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 $ 8,000,000 $ 5,000,000 $ 3,000,000
Contribution margin $ 3,300,000 $ 2,100,000 $ 1,200,000
Divisional segment margin $ 2,000,000 $ 1,400,000 $ 600,000
Net operating income last year for Nantor Corporation was $800,000.
In last year’s income statement segmented by division, what were Nantor’s total common fixed
expenses?
A) $1,300,000
B) $1,600,000
C) $1,250,000
D) $1,200,000
273) Nantor 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 $ 8,000,000 $ 5,000,000 $ 3,000,000
Contribution margin $ 3,300,000 $ 2,100,000 $ 1,200,000
Divisional segment margin $ 2,000,000 $ 1,400,000 $ 600,000
Net operating income last year for Nantor Corporation was $800,000.
If the Northern Division’s sales last year were $600,000 higher, how would this have changed
Nantor’s net operating income? (Assume no change in selling prices, variable expenses per unit,
or fixed expenses.)
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A) $240,000 increase
B) $60,000 increase
C) $160,000 increase
D) $1,200,000 increase
274) Data for January for Bondi Corporation and its two major business segments, North and
South, appear below:
Sales revenues, North $ 660,000
Variable expenses, North $ 383,000
Traceable fixed expenses, North $ 79,000
Sales revenues, South $ 510,000
Variable expenses, South $ 291,000
Traceable fixed expenses, South $ 66,000
In addition, common fixed expenses totaled $179,000 and were allocated as follows: $93,000 to
the North business segment and $86,000 to the South business segment.
The contribution margin of the South business segment is:
A) $198,000
B) $496,000
C) $219,000
D) $105,000
275) Data for January for Bondi Corporation and its two major business segments, North and
South, appear below:
Sales revenues, North $ 647,000
Variable expenses, North $ 375,400
Traceable fixed expenses, North $ 77,300
Sales revenues, South $ 499,100
Variable expenses, South $ 284,800
Traceable fixed expenses, South $ 64,600
In addition, common fixed expenses totaled $175,100 and were allocated as follows: $90,900 to
the North business segment and $84,200 to the South business segment.
A properly constructed segmented income statement in a contribution format would show that
the segment margin of the North business segment is:
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A) $103,400
B) $375,400
C) $194,300
D) $180,700
276) Data for January for Bondi Corporation and its two major business segments, North and
South, appear below:
Sales revenues, North $ 660,000
Variable expenses, North $ 383,000
Traceable fixed expenses, North $ 79,000
Sales revenues, South $ 510,000
Variable expenses, South $ 291,000
Traceable fixed expenses, South $ 66,000
In addition, common fixed expenses totaled $179,000 and were allocated as follows: $93,000 to
the North business segment and $86,000 to the South business segment.
A properly constructed segmented income statement in a contribution format would show that
the segment margin of the North business segment is:
A) $105,000
B) $383,000
C) $198,000
D) $184,000
277) Data for January for Bondi Corporation and its two major business segments, North and
South, appear below:
Sales revenues, North $ 660,000
Variable expenses, North $ 383,000
Traceable fixed expenses, North $ 79,000
Sales revenues, South $ 510,000
Variable expenses, South $ 291,000
Traceable fixed expenses, South $ 66,000
In addition, common fixed expenses totaled $179,000 and were allocated as follows: $93,000 to
the North business segment and $86,000 to the South 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:
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A) $(7,000)
B) $172,000
C) $351,000
D) $496,000
278) Tubaugh Corporation has two major business segments—East and West. In December, the
East business segment had sales revenues of $330,000, variable expenses of $180,000, and
traceable fixed expenses of $40,000. During the same month, the West business segment had
sales revenues of $1,000,000, variable expenses of $516,000, and traceable fixed expenses of
$191,000. The common fixed expenses totaled $290,000 and were allocated as follows:
$145,000 to the East business segment and $145,000 to the West business segment.
The contribution margin of the West business segment is:
A) $484,000
B) $(43,000)
C) $645,000
D) $110,000
279) Tubaugh Corporation has two major business segments—East and West. In December, the
East business segment had sales revenues of $690,000, variable expenses of $352,000, and
traceable fixed expenses of $104,000. During the same month, the West business segment had
sales revenues of $140,000, variable expenses of $56,000, and traceable fixed expenses of
$24,000. The common fixed expenses totaled $162,000 and were allocated as follows: $89,000
to the East business segment and $73,000 to the West business segment.
The contribution margin of the West business segment is:
A) $84,000
B) $234,000
C) $422,000
D) $145,000
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280) Tubaugh Corporation has two major business segments—East and West. In December, the
East business segment had sales revenues of $380,000, variable expenses of $205,000, and
traceable fixed expenses of $45,000. During the same month, the West business segment had
sales revenues of $1,050,000, variable expenses of $536,000, and traceable fixed expenses of
$201,000. The common fixed expenses totaled $310,000 and were allocated as follows:
$155,000 to the East business segment and $155,000 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:
A) $205,000
B) $130,000
C) $(20,000)
D) $(23,000)
281) Tubaugh Corporation has two major business segments—East and West. In December, the
East business segment had sales revenues of $690,000, variable expenses of $352,000, and
traceable fixed expenses of $104,000. During the same month, the West business segment had
sales revenues of $140,000, variable expenses of $56,000, and traceable fixed expenses of
$24,000. The common fixed expenses totaled $162,000 and were allocated as follows: $89,000
to the East business segment and $73,000 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:
A) $352,000
B) $145,000
C) $234,000
D) $249,000
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282) Tubaugh Corporation has two major business segments—East and West. In December, the
East business segment had sales revenues of $690,000, variable expenses of $352,000, and
traceable fixed expenses of $104,000. During the same month, the West business segment had
sales revenues of $140,000, variable expenses of $56,000, and traceable fixed expenses of
$24,000. The common fixed expenses totaled $162,000 and were allocated as follows: $89,000
to the East business segment and $73,000 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:
A) $294,000
B) $422,000
C) $132,000
D) $(30,000)
283) Ieso Corporation has two stores: J and K. During November, Ieso Corporation reported a
net operating income of $30,000 and sales of $450,000. The contribution margin in Store J was
$100,000, or 40% of sales. The segment margin in Store K was $30,000, or 15% of sales.
Traceable fixed expenses are $60,000 in Store J, and $40,000 in Store K.
Sales in Store J totaled:
A) $400,000
B) $250,000
C) $150,000
D) $100,000
284) Ieso Corporation has two stores: J and K. During November, Ieso Corporation reported a
net operating income of $30,000 and sales of $450,000. The contribution margin in Store J was
$100,000, or 40% of sales. The segment margin in Store K was $30,000, or 15% of sales.
Traceable fixed expenses are $60,000 in Store J, and $40,000 in Store K.
Variable expenses in Store K totaled:
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A) $70,000
B) $110,000
C) $200,000
D) $130,000
285) Ieso Corporation has two stores: J and K. During November, Ieso Corporation reported a
net operating income of $30,000 and sales of $450,000. The contribution margin in Store J was
$100,000, or 40% of sales. The segment margin in Store K was $30,000, or 15% of sales.
Traceable fixed expenses are $60,000 in Store J, and $40,000 in Store K.
Ieso Corporation’s total fixed expenses for the year were:
A) $40,000
B) $100,000
C) $140,000
D) $170,000
286) Ferrar Corporation has two major business segments: Consumer and Commercial. Data
for the segments and for the company for March appear below:
Sales revenues, Consumer $ 680,000
Sales revenues, Commercial $ 280,000
Variable expenses, Consumer $ 394,000
Variable expenses, Commercial $ 143,000
Traceable fixed expenses, Consumer $ 102,000
Traceable fixed expenses, Commercial $ 45,000
In addition, common fixed expenses totaled $210,000 and were allocated as follows: $122,000 to
the Consumer business segment and $88,000 to the Commercial business segment.
The contribution margin of the Commercial business segment is:
A) $137,000
B) $184,000
C) $62,000
D) $423,000
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287) Ferrar Corporation has two major business segments: Consumer and Commercial. Data
for the segments and for the company for March appear below:
Sales revenues, Consumer $ 680,000
Sales revenues, Commercial $ 280,000
Variable expenses, Consumer $ 394,000
Variable expenses, Commercial $ 143,000
Traceable fixed expenses, Consumer $ 102,000
Traceable fixed expenses, Commercial $ 45,000
In addition, common fixed expenses totaled $210,000 and were allocated as follows: $122,000 to
the Consumer business segment and $88,000 to the Commercial business segment.
A properly constructed segmented income statement in a contribution format would show that
the segment margin of the Consumer business segment is:
Garrison 17e Rechecks 2020-13-10
A) $164,000
B) $62,000
C) $394,000
D) $184,000
288) Ferrar Corporation has two major business segments: Consumer and Commercial. Data
for the segments and for the company for March appear below:
Sales revenues, Consumer $ 680,000
Sales revenues, Commercial $ 280,000
Variable expenses, Consumer $ 394,000
Variable expenses, Commercial $ 143,000
Traceable fixed expenses, Consumer $ 102,000
Traceable fixed expenses, Commercial $ 45,000
In addition, common fixed expenses totaled $210,000 and were allocated as follows: $122,000 to
the Consumer business segment and $88,000 to the Commercial 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:
A) $66,000
B) $(144,000)
C) $423,000
D) $276,000
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289) Bertie Corporation has two divisions: Retail Division and Wholesale Division. The
following data are for the most recent operating period:
Total Company Retail Division Wholesale Division
Sales $ 608,000 $ 375,000 $ 233,000
Variable expenses $ 185,530 $ 90,000 $ 95,530
Traceable fixed expenses $ 303,000 $ 217,000 $ 86,000
The common fixed expenses of the company are $103,360.
The Retail Division’s break-even sales is closest to:
A) $369,408
B) $421,526
C) $584,815
D) $285,526
290) Bertie Corporation has two divisions: Retail Division and Wholesale Division. The
following data are for the most recent operating period:
Total Company Retail Division Wholesale Division
Sales $ 668,800 $ 412,500 $ 256,300
Variable expenses $ 196,394 $ 99,000 $ 97,394
Traceable fixed expenses $ 326,400 $ 238,700 $ 87,700
The common fixed expenses of the company are $105,400.
The Wholesale Division’s break-even sales is closest to:
A) $141,452
B) $316,765
C) $170,000
D) $526,452
291) Bertie Corporation has two divisions: Retail Division and Wholesale Division. The
following data are for the most recent operating period:
Total Company Retail Division Wholesale Division
Sales $ 608,000 $ 375,000 $ 233,000
Variable expenses $ 185,530 $ 90,000 $ 95,530
Traceable fixed expenses $ 303,000 $ 217,000 $ 86,000
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The common fixed expenses of the company are $103,360.
The Wholesale Division’s break-even sales is closest to:
A) $145,763
B) $320,949
C) $212,898
D) $584,815
292) Bertie Corporation has two divisions: Retail Division and Wholesale Division. The
following data are for the most recent operating period:
Total Company Retail Division Wholesale Division
Sales $ 608,000 $ 375,000 $ 233,000
Variable expenses $ 185,530 $ 90,000 $ 95,530
Traceable fixed expenses $ 303,000 $ 217,000 $ 86,000
The common fixed expenses of the company are $103,360.
The company’s overall break-even sales is closest to:
A) $153,526
B) $431,289
C) $526,014
D) $584,815
293) Gardella Corporation has two divisions: Domestic Division and Foreign Division. The
following data are for the most recent operating period:
Domestic Division Foreign Division
Sales $ 210,000 $ 270,000
Variable expenses $ 90,300 $ 86,400
Traceable fixed expenses $ 90,000 $ 121,000
Common fixed expense $ 37,800 $ 48,600
The common fixed expenses have been allocated to the divisions on the basis of sales.
The Domestic Division’s break-even sales is closest to:
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A) $309,474
B) $157,895
C) $224,211
D) $470,663
294) Gardella Corporation has two divisions: Domestic Division and Foreign Division. The
following data are for the most recent operating period:
Domestic Division Foreign Division
Sales $ 210,000 $ 270,000
Variable expenses $ 90,300 $ 86,400
Traceable fixed expenses $ 90,000 $ 121,000
Common fixed expense $ 37,800 $ 48,600
The common fixed expenses have been allocated to the divisions on the basis of sales.
The Foreign Division’s break-even sales is closest to:
A) $305,000
B) $249,412
C) $470,663
D) $177,941
295) Gardella Corporation has two divisions: Domestic Division and Foreign Division. The
following data are for the most recent operating period:
Domestic Division Foreign Division
Sales $ 210,000 $ 270,000
Variable expenses $ 90,300 $ 86,400
Traceable fixed expenses $ 90,000 $ 121,000
Common fixed expense $ 37,800 $ 48,600
The common fixed expenses have been allocated to the divisions on the basis of sales.
The company’s overall break-even sales is closest to:
A) $449,317
B) $134,827
C) $470,663
D) $335,836
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296) Wyrich 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 $ 522,000 $ 391,000 $ 131,000
Variable expenses 160,670 89,930 70,740
Contribution margin 361,330 301,070 60,260
Traceable fixed expenses 286,000 239,000 47,000
Segment margin 75,330 $ 62,070 $ 13,260
Common fixed expenses 73,080
Net operating income $ 2,250
The Blue Division’s break-even sales is closest to:
A) $518,750
B) $405,299
C) $381,481
D) $310,390
297) Wyrich 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 $ 522,000 $ 391,000 $ 131,000
Variable expenses 160,670 89,930 70,740
Contribution margin 361,330 301,070 60,260
Traceable fixed expenses 286,000 239,000 47,000
Segment margin 75,330 $ 62,070 $ 13,260
Common fixed expenses 73,080
Net operating income $ 2,250
The Gold Division’s break-even sales is closest to:
A) $102,174
B) $261,043
C) $142,043
D) $518,750
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298) Wyrich 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 $ 522,000 $ 391,000 $ 131,000
Variable expenses 160,670 89,930 70,740
Contribution margin 361,330 301,070 60,260
Traceable fixed expenses 286,000 239,000 47,000
Segment margin 75,330 $ 62,070 $ 13,260
Common fixed expenses 73,080
Net operating income $ 2,250
The company’s overall break-even sales is closest to:
A) $412,564
B) $506,409
C) $518,750
D) $106,186
299) Wyrich 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 $ 522,000 $ 391,000 $ 131,000
Variable expenses 160,670 89,930 70,740
Contribution margin 361,330 301,070 60,260
Traceable fixed expenses 286,000 239,000 47,000
Segment margin 75,330 $ 62,070 $ 13,260
Common fixed expenses 73,080
Net operating income $ 2,250
What is the company’s overall net operating income if it operates at the break-even points for its
two divisions?
A) $2,250
B) $0
C) $(73,080)
D) $(359,080)
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300) Carriveau Corporation has two divisions: Consumer Division and Business Division. The
following data are for the most recent operating period:
Consumer Division Business Division
Sales $ 331,000 $ 245,000
Variable expenses $ 102,610 $ 58,800
Traceable fixed expenses $ 149,000 $ 139,000
The company’s common fixed expenses total $63,360.
The Consumer Division’s break-even sales is closest to:
A) $215,942
B) $268,710
C) $488,153
D) $307,768
301) Carriveau Corporation has two divisions: Consumer Division and Business Division. The
following data are for the most recent operating period:
Consumer Division Business Division
Sales $ 331,000 $ 245,000
Variable expenses $ 102,610 $ 58,800
Traceable fixed expenses $ 149,000 $ 139,000
The company’s common fixed expenses total $63,360.
The Business Division’s break-even sales is closest to:
A) $488,153
B) $218,355
C) $266,263
D) $182,895
302) Carriveau Corporation has two divisions: Consumer Division and Business Division. The
following data are for the most recent operating period:
Consumer Division Business Division
Sales $ 331,000 $ 245,000
Variable expenses $ 102,610 $ 58,800
Traceable fixed expenses $ 149,000 $ 139,000
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The company’s common fixed expenses total $63,360.
The company’s overall break-even sales is closest to:
A) $398,837
B) $288,296
C) $488,153
D) $89,316
303) Jemmott Corporation has two divisions: Western Division and Eastern Division. The
following report is for the most recent operating period:
Total Company Western Division Eastern Division
Sales $ 406,000 $ 188,000 $ 218,000
Variable expenses 111,880 63,920 47,960
Contribution margin 294,120 124,080 170,040
Traceable fixed expenses 191,000 85,000 106,000
Segment margin 103,120 39,080 64,040
Common fixed expenses 69,020 31,960 37,060
Net operating income $ 34,100 $ 7,120 $ 26,980
The common fixed expenses have been allocated to the divisions on the basis of sales.
The Western Division’s break-even sales is closest to:
A) $128,788
B) $233,364
C) $177,212
D) $358,929
304) Jemmott Corporation has two divisions: Western Division and Eastern Division. The
following report is for the most recent operating period:
Total Company Western Division Eastern Division
Sales $ 406,000 $ 188,000 $ 218,000
Variable expenses 111,880 63,920 47,960
Contribution margin 294,120 124,080 170,040
Traceable fixed expenses 191,000 85,000 106,000
Segment margin 103,120 39,080 64,040
Common fixed expenses 69,020 31,960 37,060
Net operating income $ 34,100 $ 7,120 $ 26,980
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The common fixed expenses have been allocated to the divisions on the basis of sales.
The Eastern Division’s break-even sales is closest to:
A) $135,897
B) $224,385
C) $358,929
D) $183,410
305) Jemmott Corporation has two divisions: Western Division and Eastern Division. The
following report is for the most recent operating period:
Total Company Western Division Eastern Division
Sales $ 406,000 $ 188,000 $ 218,000
Variable expenses 111,880 63,920 47,960
Contribution margin 294,120 124,080 170,040
Traceable fixed expenses 191,000 85,000 106,000
Segment margin 103,120 39,080 64,040
Common fixed expenses 69,020 31,960 37,060
Net operating income $ 34,100 $ 7,120 $ 26,980
The common fixed expenses have been allocated to the divisions on the basis of sales.
The company’s overall break-even sales is closest to:
A) $94,243
B) $271,743
C) $264,685
D) $358,929
306) Jemmott Corporation has two divisions: Western Division and Eastern Division. The
following report is for the most recent operating period:
Total Company Western Division Eastern Division
Sales $ 406,000 $ 188,000 $ 218,000
Variable expenses 111,880 63,920 47,960
Contribution margin 294,120 124,080 170,040
Traceable fixed expenses 191,000 85,000 106,000
Segment margin 103,120 39,080 64,040
Common fixed expenses 69,020 31,960 37,060
Net operating income $ 34,100 $ 7,120 $ 26,980
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The common fixed expenses have been allocated to the divisions on the basis of sales.
What is the company’s overall net operating income if it operates at the break-even points for
its two divisions?
A) $34,100
B) $0
C) $(69,020)
D) $(260,020)
307) Neelon Corporation has two divisions: Southern Division and Northern Division. The
following data are for the most recent operating period:
Total Company Southern Division Northern Division
Sales $ 418,000 $ 193,000 $ 225,000
Variable expenses $ 130,880 $ 79,130 $ 51,750
Traceable fixed expenses $ 186,000 $ 77,000 $ 109,000
Common fixed expense $ 79,420 $ 36,670 $ 42,750
The common fixed expenses have been allocated to the divisions on the basis of sales.
The Southern Division’s break-even sales is closest to:
A) $192,661
B) $265,119
C) $386,408
D) $130,508
308) Neelon Corporation has two divisions: Southern Division and Northern Division. The
following data are for the most recent operating period:
Total Company Southern Division Northern Division
Sales $ 418,900 $ 227,700 $ 191,200
Variable expenses $ 153,446 $ 86,526 $ 66,920
Traceable fixed expenses $ 225,200 $ 84,200 $ 141,000
Common fixed expense $ 83,780 $ 45,540 $ 38,240
The common fixed expenses have been allocated to the divisions on the basis of sales.
The Northern Division’s break-even sales is closest to:
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A) $216,923
B) $186,714
C) $209,258
D) $270,935
309) Neelon Corporation has two divisions: Southern Division and Northern Division. The
following data are for the most recent operating period:
Total Company Southern Division Northern Division
Sales $ 418,000 $ 193,000 $ 225,000
Variable expenses $ 130,880 $ 79,130 $ 51,750
Traceable fixed expenses $ 186,000 $ 77,000 $ 109,000
Common fixed expense $ 79,420 $ 36,670 $ 42,750
The common fixed expenses have been allocated to the divisions on the basis of sales.
The Northern Division’s break-even sales is closest to:
A) $141,558
B) $197,078
C) $244,701
D) $386,408
310) Neelon Corporation has two divisions: Southern Division and Northern Division. The
following data are for the most recent operating period:
Total Company Southern Division Northern Division
Sales $ 418,000 $ 193,000 $ 225,000
Variable expenses $ 130,880 $ 79,130 $ 51,750
Traceable fixed expenses $ 186,000 $ 77,000 $ 109,000
Common fixed expense $ 79,420 $ 36,670 $ 42,750
The common fixed expenses have been allocated to the divisions on the basis of sales.
The company’s overall break-even sales is closest to:
A) $272,067
B) $328,299
C) $114,341
D) $386,408
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311) Neelon Corporation has two divisions: Southern Division and Northern Division. The
following data are for the most recent operating period:
Total Company Southern Division Northern Division
Sales $ 418,000 $ 193,000 $ 225,000
Variable expenses $ 130,880 $ 79,130 $ 51,750
Traceable fixed expenses $ 186,000 $ 77,000 $ 109,000
Common fixed expense $ 79,420 $ 36,670 $ 42,750
The common fixed expenses have been allocated to the divisions on the basis of sales.
What is the company’s overall net operating income if it operates at the break-even points for
its two divisions?
A) $(79,420)
B) $21,700
C) $(265,420)
D) $0
312) Variable manufacturing overhead costs are treated as product costs under both absorption
and variable costing.
⊚ true
⊚ false
313) Absorption costing treats all manufacturing costs as product costs.
⊚ true
⊚ false
314) Under variable costing, fixed manufacturing overhead is treated as a product cost.
⊚ true
⊚ false
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315) Under variable costing, all variable production costs are treated as product costs.
⊚ true
⊚ false
316) Under variable costing, an increase in fixed manufacturing overhead will affect the unit
product cost.
⊚ true
⊚ false
317) Under variable costing, only variable production costs are treated as product costs.
⊚ true
⊚ false
318) Absorption costing treats all fixed costs as product costs.
⊚ true
⊚ false
319) Variable costing is more compatible with cost-volume-profit analysis than is absorption
costing.
⊚ true
⊚ false
320) Under the absorption costing method, a company can increase profits simply by
increasing the number of units produced.
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⊚ true
⊚ false
321) Net operating income computed using absorption costing will always be less than net
operating income computed using variable costing.
⊚ true
⊚ false
322) Under absorption costing, a portion of fixed manufacturing overhead cost is released
from inventory when production volume exceeds sales volume.
⊚ true
⊚ false
323) Variable costing net operating income is usually closer to the net cash flow of a period
than is absorption costing net operating income.
⊚ true
⊚ false
324) When reconciling variable costing and absorption costing net operating income, fixed
manufacturing overhead costs deferred in inventory under absorption costing should be deducted
from variable costing net operating income to arrive at the absorption costing net operating
income.
⊚ true
⊚ false
325) Lean production should result in reduced inventories. If lean production is successfully
implemented, the difference in net operating income computed under the absorption and variable
costing methods should be reduced.
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⊚ true
⊚ false
326) Assuming the LIFO inventory flow assumption, when production exceeds sales for the
period, absorption costing net operating income will exceed variable costing net operating
income.
⊚ true
⊚ false
327) Under the LIFO inventory flow assumption, if the number of units in inventories increase
between the beginning and end of the period, absorption costing net operating income will
generally be greater than variable costing net operating income.
⊚ true
⊚ false
328) Segment margin is sales less variable expenses less traceable fixed expenses.
⊚ true
⊚ false
329) All other things the same, if a division’s traceable fixed expenses decrease then the
division’s segment margin will decrease.
⊚ true
⊚ false
330) The salary paid to a store manager is not a traceable fixed expense of the store.
⊚ true
⊚ false
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331) 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.
⊚ true
⊚ false
332) Allocating common fixed costs to segments on segmented income statements increases
the usefulness of such statements.
⊚ true
⊚ false
333) If a cost must be arbitrarily allocated in order to be assigned to a particular segment, then
that cost should be considered a common cost.
⊚ true
⊚ false
334) Segmented statements for internal use should not be prepared using the contribution
format.
⊚ true
⊚ false
335) When using segmented income statements, the dollar sales for a company to break even
equals the traceable fixed expenses divided by the overall CM ratio.
⊚ true
⊚ false
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336) Common fixed expenses should not be allocated to business segments when performing
break-even calculations and making decisions.
⊚ true
⊚ false
337) When computing the break even for a segment, the calculations include the company’s
common fixed expenses.
⊚ true
⊚ false
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Answer Key
Test name: chapter 6
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