277) 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.
278) 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
$
Variable costing net operating income, this year
$
Fixed manufacturing overhead costs deferred in inventory
under absorption costing, last year
$
Fixed manufacturing overhead costs released from inventory
under absorption costing, this year
$
Required:
a. Determine the absorption costing net operating income last year.
b. Determine the absorption costing net operating income this year.
Last Year
Variable costing net operating income
$
71,000
$
Add fixed manufacturing overhead costs deferred
in inventory under absorption costing
(11,000
)
Absorption costing net operating income
$
73,000
$
363
279) 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
$
Variable costing net operating income, this year
$
Beginning inventory, last year
units
Ending inventory, last year
units
Ending inventory, this year
units
Fixed manufacturing overhead cost per unit
both last year and this year
$
unit
Required:
a. Determine the absorption costing net operating income for last year.
b. Determine the absorption costing net operating income for this year.
280) 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.
281) 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.
$200 per unit × 3,000 units)
$52 per unit × 3,000 units)
Contribution margin
Traceable fixed production costs
Traceable fixed selling expenses
Segment margin
Common fixed expenses
Net operating income
282) 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.
Sales
$180,000
Variable expenses:
Materials
Direct labor
Manufacturing overhead
Selling expense
Total variable expenses
Contribution margin
Fixed expenses:
Manufacturing overhead
Segment margin
Common expense:
Administrative expense
Net operating income
283) 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.
Sales
Variable expenses
Contribution margin
Traceable fixed expenses
Segment margin
Common fixed expenses
Net operating income
284) 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.
Sales
$
$
750,000
$
620,000
Variable expenses
368,000
254,000
Contribution margin
382,000
366,000
Traceable fixed expenses
98,000
112,000
Segment margin
$
284,000
$
254,000
Common fixed expenses
Net operating income
$
285) 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.
286) 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?
Company
Seed
Division
Sales
$
487,000
$
304,000
$
183,000
Variable expenses
117,470
79,040
38,430
Contribution margin
369,530
224,960
144,570
Traceable fixed expenses
255,000
162,000
93,000
Segment margin
114,530
$
62,960
$
51,570
Common fixed expenses
Net operating income
$