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Exam 7: Master Budgeting

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Question 91

Multiple Choice

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Iancu 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?

A) $124 per unit
B) $115 per unit
C) $78 per unit
D) $87 per unit

E) C) and D)
F) A) and B)

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Question 92

Multiple Choice

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The principal difference between variable costing and absorption costing centers on:

A) whether variable manufacturing costs should be included in product costs.
B) whether fixed manufacturing costs should be included in product costs.
C) whether fixed manufacturing costs and fixed selling and administrative costs should be included in product costs.
D) whether selling and administrative costs should be included in product costs.

E) None of the above
F) C) and D)

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Question 93

Multiple Choice

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Meyer Corporation has two sales areas: North and South. During April, the contribution margin in the North was $90,000, or 30% of sales. The segment margin in the South was $25,000, or 10% of sales. Traceable fixed expenses were $30,000 in the North and $15,000 in the South. Meyer Corporation reported a total net operating income of $52,000. The total fixed expenses for Meyer Corporation were:

Pabbatti Corporation, 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. What is the unit product cost for the month under variable costing? b. Prepare a contribution format income statement for the month using variable costing. c. Without preparing an income statement, determine the absorption costing net operating income for the month. (Hint: Use the reconciliation method.)

Kosco Corporation produces a single product. The company's absorption costing income statement for March follows: During March, the company's variable production costs were $8 per unit and its fixed manufacturing overhead totaled $5,000. The break-even point in units for the month under variable costing would be:

Jarvix Corporation, 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. What is the net operating income for the month under absorption costing?

Hatfield 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?

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: The total gross margin for the month under absorption costing is:

Meyer Corporation has two sales areas: North and South. During April, the contribution margin in the North was $90,000, or 30% of sales. The segment margin in the South was $25,000, or 10% of sales. Traceable fixed expenses were $30,000 in the North and $15,000 in the South. Meyer Corporation reported a total net operating income of $52,000. The variable costs for the South area were:

Gabbert Corporation, which has only one product, has provided the following data concerning its most recent month of operations: The total gross margin for the month under the absorption costing approach is:

Crystal Corporation produces a single product. The company's variable costing income statement for the month of May appears below: The company produced 80,000 units in May and the beginning inventory consisted of 25,000 units. Variable production costs per unit and total fixed costs have remained constant over the past several months. Under absorption costing, for May the company would report a:

Aaker 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 absorption costing?

Muhn Corporation has two divisions: Division K and Division L. Data from the most recent month appear below: 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:

When using segmented income statements, the dollar sales for a segment to break even equals the common fixed expenses of the segment divided by the segment CM ratio.

Romasanta Corporation manufactures a single product. The following data pertain to the company's operations over the last two years: What was the absorption costing net operating income this year?

Data for March for Lazarus Corporation and its two major business segments, North and South, appear below: In addition, common fixed expenses totaled $156,000 and were allocated as follows: $84,000 to the North business segment and $72,000 to the South business segment. A properly constructed segmented income statement in a contribution format would show that the segment margin of the North business segment is:

O'Neill, Incorporated's segmented income statement for the most recent month is given below. For each of the following questions, refer back to the above original data. A proposal has been made that will lower variable expenses in Store A to 62% of sales. However, this reduction can only be accomplished by an increase in Store A's traceable fixed expenses of $8,000. If this proposal is implemented and sales remain constant, overall company net operating income should:

Pevy 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:

Under absorption costing, product costs include:

Aaker 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?