Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
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192. O’Keefe Company, which has only one product, has provided the following data
concerning its most recent month of operations:
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.
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
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193. Nesman Company, which has only one product, has provided the following data
concerning its most recent month of operations:
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.
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
194. Carvey Corporation manufactures a variety of products. The following data pertain to the
company’s operations over the last two years:
Required:
a. Determine the absorption costing net operating income for last year. Show your work!
b. Determine the absorption costing net operating income for this year. Show your work!
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
195. Last year, Holroyd Corporation’s variable costing net operating income was $95,000.
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. Show your work!
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
196. Last year, Teneyck Corporation’s variable costing net operating income was $63,500 and
ending inventory decreased by 200 units. Fixed manufacturing overhead cost per unit was $5.
Required:
Determine the absorption costing net operating income for last year. Show your work!
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
197. Salonia Corporation manufactures a variety of products. The following data pertain to
the company’s operations over the last two years:
Required:
a. Determine the absorption costing net operating income last year. Show your work!
b. Determine the absorption costing net operating income this year. Show your work!
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
198. Cassin Corporation manufactures a variety of products. Last year, the company’s variable
costing net operating income was $86,300 and ending inventory decreased by 1,700 units.
Fixed manufacturing overhead cost per unit was $8.
Required:
Determine the absorption costing net operating income for last year. Show your work!
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
199. Gordy Corporation manufactures a variety of products. Last year, variable costing net
operating income was $81,000. The fixed manufacturing overhead costs released from
inventory under absorption costing amounted to $39,000.
Required:
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
200. Camren Corporation has two major business segments-Apparel and Accessories. Data
concerning those segments for December appear below:
Common fixed expenses totaled $357,000 and were allocated as follows: $161,000 to the
Apparel business segment and $196,000 to the Accessories business segment.
Required:
Prepare a segmented income statement in the contribution format for the company. Omit
percentages; show only dollar amounts.
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
201. The IT Corporation produces and markets two types of electronic calculators: Model 11
and Model 12. The following data were gathered on activities last month:
Required:
Prepare a segmented income statement in the contribution format for last month.
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
202. Data for May concerning Dorow Corporation’s two major business segments-Fibers and
Feedstocks-appear below:
Common fixed expenses totaled $345,000 and were allocated as follows: $186,000 to the
Fibers business segment and $159,000 to the Feedstocks business segment.
Required:
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
203. Mossor Corporation has two major business segments-Retail and Wholesale. In
December, the Retail business segment had sales revenues of $510,000, variable expenses of
$296,000, and traceable fixed expenses of $61,000. During the same month, the Wholesale
business segment had sales revenues of $510,000, variable expenses of $240,000, and
traceable fixed expenses of $82,000. Common fixed expenses totaled $191,000 and were
allocated as follows: $113,000 to the Retail business segment and $78,000 to the Wholesale
business segment.
Required:
Prepare a segmented income statement in the contribution format for the company. Omit
percentages; show only dollar amounts.