89) 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
$
$
361,000
Variable expenses
255,960
173,280
Contribution margin
261,040
187,720
Traceable fixed expenses
171,000
122,000
Segment margin
90,040
$
$
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
90) 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
91) 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
Sigma
Sales
$
657,000
$
311,000
$
Variable expenses
234,850
65,310
169,540
Contribution margin
422,150
245,690
176,460
Traceable fixed expenses
311,000
176,000
135,000
Segment margin
111,150
$
69,690
$
41,460
Net operating income
$
92) 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
93) 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
$
$
303,000
Variable expenses
144,910
63,630
Contribution margin
412,090
239,370
Traceable fixed expenses
273,000
145,000
Segment margin
139,090
94,370
Common fixed expenses
94,690
51,510
Net operating income
$
44,400
$
$
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
94) 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
95) 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
$
$
296,000
Variable expenses
187,760
133,200
Contribution margin
356,240
162,800
Traceable fixed expenses
254,000
118,000
Segment margin
102,240
44,800
Common fixed expenses
54,400
29,600
Net operating income
$
47,840
$
$
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
96) 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
97) Caruso Inc., 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
Direct materials
Direct labor
Variable manufacturing overhead
5
($220,000 ÷ 4,000 units produced)
Absorption costing unit product cost
170
98) Caruso Inc., 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
Direct materials
Direct labor
Variable manufacturing overhead
5
Variable costing unit product cost
115
99) 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?
A) $133,100
B) $113,500
C) $40,000
D) $93,100
($4 per unit × 4,900 units sold)
Fixed manufacturing overhead
Fixed selling and administrative expense
Total period cost variable costing
$
133,100
100) 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
($4 × 4,900 units)
Fixed selling and administrative expense
73,500
Total period cost absorption costing
$
93,100
101) 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 absorption costing is:
A) $247 per unit
B) $166 per unit
C) $332 per unit
D) $171 per unit
Direct materials
Direct labor
Variable manufacturing overhead
5
($532,000 ÷ 7,000 units produced)
Absorption costing unit product cost
247
102) 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
Direct materials
Direct labor
Variable manufacturing overhead
5
Variable costing unit product cost
171
103) 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 variable costing?
A) $104 per unit
B) $79 per unit
C) $88 per unit
D) $95 per unit
Direct materials
$
26
Direct labor
46
Variable manufacturing overhead
7
Variable costing unit product cost
$
79
104) 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
Direct materials
$
26
Direct labor
46
Variable manufacturing overhead
7
($105,600 ÷ 6,600 units produced)
16
Absorption costing unit product cost
$
95
105) 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
106) 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
99
107) 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 have remained constant on a per unit basis over the past
several months.
The value of the company’s inventory on November 30 under absorption costing would be:
A) $54,000
B) $66,000
C) $78,000
D) $81,000