Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
100. What is the net operating income for the month under variable costing?
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
101. What is the net operating income for the month under absorption costing?
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
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DeAnne Company produces a single product. The company’s variable costing income
statement for August appears below:
The company produced 35,000 units in August and the beginning inventory consisted of
8,000 units. Variable production costs per unit and total fixed costs have remained constant
over the past several months.
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
102. The value of the company’s inventory on August 31 under the absorption costing method
is:
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
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103. Under absorption costing, for the month ended August 31, the company would report a:
Fahey Company manufactures a single product that it sells for $25 per unit. The company has
the following cost structure:
There were no units in beginning inventory. During the year, 18,000 units were produced and
15,000 units were sold.
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
104. Under absorption costing, the unit product cost is:
105. The company’s net operating income for the year under variable costing is:
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
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Galino Company, which has only one product, has provided the following data concerning its
most recent month of operations:
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
106. The total contribution margin for the month under the variable costing approach is:
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
107. The total gross margin for the month under the absorption costing approach is:
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
108. What is the total period cost for the month under the variable costing approach?
109. What is the total period cost for the month under the absorption costing approach?
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
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Kilihea Corporation produces a single product. The company’s absorption costing income
statement for July follows:
The company’s variable production costs are $20 per unit and its fixed manufacturing
overhead totals $80,000 per month.
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
110. Net operating income under the variable costing method for July would be:
111. The contribution margin per unit during July was:
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
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112. The break-even point in units for the month under variable costing is:
Eagle Corporation manufactures a picnic table. Shown below is Eagle’s cost structure:
In its first year of operations, Eagle produced and sold 10,000 tables. The tables sold for $120
each.
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
113. If Eagle had sold only 9,000 tables in its first year, what total amount of cost would have
been assigned to the 1,000 tables in finished goods inventory under the absorption costing
method?
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
114. How would Eagle’s variable costing net operating income have been affected in its first
year if only 9,000 tables were sold instead of 10,000?
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
115. How would Eagle’s absorption costing net operating income have been affected in its
first year if 12,000 tables were produced instead of 10,000 and Eagle still sold 10,000 tables?
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
Green Enterprises produces a single product. The following data were provided by the
company for the most recent period:
116. Under variable costing, the unit product cost is:
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
117. Under absorption costing, the unit product cost is:
118. For the period above, one would expect the net operating income under absorption
costing to be:
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
Whitney, Inc., produces a single product. The following data pertain to one month’s
operations:
119. The carrying value on the balance sheet of the ending finished goods inventory under
variable costing would be:
Chapter 06 – Variable Costing and Segment Reporting: Tools for Management
120. The carrying value on the balance sheet of the ending finished goods inventory under
absorption costing would be:
121. For the month referred to above, net operating income under variable costing will be: