Question 1

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:

Accepted Answer

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.

Question 2

Kaaua Corporation has provided the following data for its two most recent years of operation:
  Which of the following statements is true for Year 2?

Accepted Answer

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

Question 3

Neef Corporation has provided the following data for its two most recent years of operation:
  
-Which of the following statements is true for Year 2?

Accepted Answer

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

Question 4

Assuming that direct labor is a variable cost,the primary difference between the absorption and variable costing is that:

Accepted Answer

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.

Question 5

Carriveau Corporation has two divisions: Consumer Division and Business Division. The following data are for the most recent operating period:
  The company's common fixed expenses total $63,360.
-The Business Division's break-even sales is closest to:

Accepted Answer

A)   $488,153
B)   $218,355
C)   $266,263
D)   $182,895

Question 6

The following data pertain to last year's operations at Clarkson,Incorporated,a company that produces a single product:
 What was the absorption costing net operating income last year?

Accepted Answer

A)   $44,000
B)   $48,000
C)   $50,000
D)   $49,000

Question 7

Hadley Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
 
-What is the unit product cost for the month under variable costing?

Accepted Answer

A)   $99 per unit
B)   $110 per unit
C)   $82 per unit
D)   $93 per unit

Question 8

The Southern Corporation manufactures a single product and has the following cost structure:
  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:

Accepted Answer

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.

Question 9

Baraban Corporation has provided the following data for its most recent year of operation:
  
-The net operating income (loss) under absorption costing closest to:

Accepted Answer

A)   ($4,000) 
B)   $9,000
C)   $117,000
D)   $72,000

Question 10

The salary paid to a store manager is not a traceable fixed expense of the store.

Accepted Answer

A) True 
 B)False

Question 11

Neelon Corporation has two divisions: Southern Division and Northern Division. The following data are for the most recent operating period:
  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:

Accepted Answer

A)   $141,558
B)   $197,078
C)   $244,701
D)   $386,408

Question 12

Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
 
-What is the total period cost for the month under variable costing?

Accepted Answer

A)   $54,400
B)   $69,400
C)   $57,400
D)   $15,000

Question 13

Which of the following is true of a company that uses absorption costing?

Accepted Answer

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.

Question 14

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:

Accepted Answer

A)   $84,000
B)   $234,000
C)   $422,000
D)   $145,000

Question 15

Jemmott Corporation has two divisions: Western Division and Eastern Division. The following report is for the most recent operating period:
  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:

Accepted Answer

A)   $94,243
B)   $271,743
C)   $264,685
D)   $358,929

Question 16

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.

Accepted Answer

A) True 
 B)False

Question 17

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?

Accepted Answer

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

Question 18

Kern Corporation produces a single product. Selected information concerning the operations of the company follow:
  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?

Accepted Answer

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.

Question 19

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?

Accepted Answer

A)   $69,000
B)   $90,900
C)   $21,900
D)   $112,800

Question 20

Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
 
-What is the total period cost for the month under the absorption costing?

Accepted Answer

A)   $54,400
B)   $3,000
C)   $69,400
D)   $15,000

Exam 6: Variable Costing and Segment Reporting: Tools for Management

Jemmott Corporation has two divisions: Western Division and Eastern Division. The following report is for the most recent operating period: 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:

Correct Answer
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Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations: -What is the total period cost for the month under the absorption costing?

Correct Answer
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Hadley Corporation, which has only one product, has provided the following data concerning its most recent month of operations: -What is the unit product cost for the month under variable costing?

Correct Answer
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Correct Answer
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Carriveau Corporation has two divisions: Consumer Division and Business Division. The following data are for the most recent operating period: The company's common fixed expenses total $63,360. -The Business Division's break-even sales is closest to:

Correct Answer
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The following data pertain to last year's operations at Clarkson,Incorporated,a company that produces a single product: What was the absorption costing net operating income last year?

Correct Answer
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Kern Corporation produces a single product. Selected information concerning the operations of the company follow: 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?

Correct Answer
verified

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?

Correct Answer
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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.

Correct Answer
verified

Baraban Corporation has provided the following data for its most recent year of operation: -The net operating income (loss) under absorption costing closest to:

Correct Answer
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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:

Correct Answer
verified

Correct Answer
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Kaaua Corporation has provided the following data for its two most recent years of operation: Which of the following statements is true for Year 2?

Correct Answer
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Assuming that direct labor is a variable cost,the primary difference between the absorption and variable costing is that:

Correct Answer
verified

Which of the following is true of a company that uses absorption costing?

Correct Answer
verified

Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations: -What is the total period cost for the month under variable costing?

Correct Answer
verified

Neelon Corporation has two divisions: Southern Division and Northern Division. The following data are for the most recent operating period: 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:

Correct Answer
verified

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?

Correct Answer
verified

The salary paid to a store manager is not a traceable fixed expense of the store.

Correct Answer
verified

Neef Corporation has provided the following data for its two most recent years of operation: -Which of the following statements is true for Year 2?

Correct Answer
verified

Exam 6: Variable Costing and Segment Reporting: Tools for Management

Jemmott Corporation has two divisions: Western Division and Eastern Division. The following report is for the most recent operating period: 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:

Correct AnswerverifiedShow Answer

Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations: -What is the total period cost for the month under the absorption costing?

Correct AnswerverifiedShow Answer

Hadley Corporation, which has only one product, has provided the following data concerning its most recent month of operations: -What is the unit product cost for the month under variable costing?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Carriveau Corporation has two divisions: Consumer Division and Business Division. The following data are for the most recent operating period: The company's common fixed expenses total $63,360. -The Business Division's break-even sales is closest to:

Correct AnswerverifiedShow Answer

The following data pertain to last year's operations at Clarkson,Incorporated,a company that produces a single product: What was the absorption costing net operating income last year?

Correct AnswerverifiedShow Answer

Kern Corporation produces a single product. Selected information concerning the operations of the company follow: 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?

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Baraban Corporation has provided the following data for its most recent year of operation: -The net operating income (loss) under absorption costing closest to:

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Kaaua Corporation has provided the following data for its two most recent years of operation: Which of the following statements is true for Year 2?

Correct AnswerverifiedShow Answer

Assuming that direct labor is a variable cost,the primary difference between the absorption and variable costing is that:

Correct AnswerverifiedShow Answer

Which of the following is true of a company that uses absorption costing?

Correct AnswerverifiedShow Answer

Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations: -What is the total period cost for the month under variable costing?

Correct AnswerverifiedShow Answer

Neelon Corporation has two divisions: Southern Division and Northern Division. The following data are for the most recent operating period: 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:

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

The salary paid to a store manager is not a traceable fixed expense of the store.

Correct AnswerverifiedShow Answer

Neef Corporation has provided the following data for its two most recent years of operation: -Which of the following statements is true for Year 2?

Correct AnswerverifiedShow Answer

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