Question 1

Which of the following statements is true?

Accepted Answer

A)  The amount of fixed manufacturing overhead released from inventories is $248,000
B)  The amount of fixed manufacturing overhead deferred in inventories is $248,000
C)  The amount of fixed manufacturing overhead released from inventories is $30,000
D)  The amount of fixed manufacturing overhead deferred in inventories is $30,000E) B) and C)
F) A) and D)

Question 2

Delisa Corporation has two divisions: Division L and Division Q.Data from the most recent month appear below:  The break-even in sales dollars for Division Q is closest to:

Accepted Answer

A)  $352,635
B)  $234,615
C)  $403,635
D)  $512,742E) B) and C)
F) A) and D)

Question 3

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 storeE) A) and B)
F) A) and C)

Question 4

The unit product cost under variable costing in Year 1 is closest to:

Accepted Answer

A)  $19.00
B)  $24.00
C)  $26.00
D)  $31.00E) A) and B)
F) B) and D)

Question 5

Croft Corporation produces a single product.Last year, the company had a net operating income of $160,000 using absorption costing and $149,000 using variable costing.The fixed manufacturing overhead cost was $10 per unit.There were no beginning inventories.If 43,000 units were produced last year, then sales last year were:

Accepted Answer

A)  32,000 units
B)  40,000 units 
C)  41,900 units
D)  54,000 unitsE) A) and C)
F) B) and C)

Question 6

The Gold Division's break-even sales is closest to:

Accepted Answer

A)  $102,174
B)  $261,043
C)  $142,043
D)  $518,750E) B) and C)
F) A) and D)

Question 7

Therrell Corporation has two divisions: Bulb Division and Seed 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.
Required:
a.What is the Bulb Division's break-even in sales dollars?
b.What is the Seed Division's break-even in sales dollars?
c.What is the company's overall break-even in sales dollars?

Accepted Answer

_TB2627_00 a.Bulb Division break-even:
S...

Question 8

Under absorption costing, the value of the ending finished goods inventory would be:

Accepted Answer

A)  $7,200
B)  $7,650
C)  $8,000
D)  $9,700E) B) and C)
F) A) and D)

Question 9

Last year, Tinklenberg Corporation's variable costing net operating income was $52,400 and its inventory decreased by 1,400 units.Fixed manufacturing overhead cost was $8 per unit for both units in beginning and in ending inventory.What was the absorption costing net operating income last year?

Accepted Answer

A)  $41,200
B)  $11,200
C)  $63,600
D)  $52,400E) All of the above
F) None of the above

Question 10

The net operating income (loss) under variable costing in Year 2 is closest to:

Accepted Answer

A)  $41,000
B)  $203,000
C)  $175,000
D)  $47,000E) A) and C)
F) A) and D)

Question 11

What is the net operating income for the month under variable costing?

Accepted Answer

A)  $3,800
B)  $(6,100) 
C)  $3,900
D)  $7,700E) B) and D)
F) A) and B)

Question 12

Under absorption costing, the unit product cost would be:

Accepted Answer

A)  $7 per unit
B)  $16 per unit
C)  $11 per unit
D)  $10 per unitE) A) and B)
F) B) and D)

Question 13

A company that produces a single product had a net operating income of $65,000 using variable costing and a net operating income of $95,000 using absorption costing.Total fixed manufacturing overhead was $60,000 and production was 10,000 units.This year was the first year of operations.Between the beginning and the end of the year, the inventory level:

Accepted Answer

A)  decreased by 5,000 units
B)  increased by 5,000 units
C)  decreased by 30,000 units
D)  increased by 30,000 unitsE) A) and C)
F) B) and C)

Question 14

The unit product cost under variable costing in Year 1 is closest to:

Accepted Answer

A)  $63.00
B)  $69.00
C)  $23.00
D)  $29.00E) None of the above
F) B) and D)

Question 15

The unit product cost under variable costing is:

Accepted Answer

A)  $169 per unit
B)  $171 per unit
C)  $247 per unit
D)  $174 per unitE) B) and C)
F) A) and C)

Question 16

The unit product cost under absorption costing in Year 2 is closest to:

Accepted Answer

A)  $39.00
B)  $23.00
C)  $10.00
D)  $33.00E) A) and C)
F) All of the above

Question 17

Hayworth Corporation has just segmented last year's income statement into its ten product lines.The chief executive officer (CEO) is curious as to what effect dropping one of the product lines at the beginning of last year would have had on overall company profit.What is the best number for the CEO to look at to determine the effect of this elimination on the net operating income of the company as a whole?

Accepted Answer

A)  the product line's sales dollars
B)  the product line's contribution margin
C)  the product line's segment margin
D)  the product line's segment margin minus an allocated portion of common fixed expensesE) B) and D)
F) B) and C)

Question 18

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:  What is the net operating income for the month under variable costing?

Accepted Answer

A)  $15,200
B)  $(6,600) 
C)  $10,200
D)  $5,000E) B) and C)
F) A) and B)

Question 19

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.E) A) and B)
F) A) and C)

Question 20

Under absorption costing, the ending inventory for the year would be valued at:

Accepted Answer

A)  $0
B)  $216,000
C)  $248,250
D)  $180,000E) A) and B)
F) C) and D)

Exam 7: Variable Costing and Segment Reporting: Tools for Management

Under absorption costing, the unit product cost would be:

Correct Answer
verified

Under absorption costing, the value of the ending finished goods inventory would be:

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
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Delisa Corporation has two divisions: Division L and Division Q.Data from the most recent month appear below: The break-even in sales dollars for Division Q is closest to:

Correct Answer
verified

The unit product cost under absorption costing in Year 2 is closest to:

Correct Answer
verified

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: What is the net operating income for the month under variable costing?

Correct Answer
verified

The unit product cost under variable costing is:

Correct Answer
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The net operating income (loss) under variable costing in Year 2 is closest to:

Correct Answer
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Correct Answer
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_TB2627_00 a.Bulb Division break-even:
S...
View Answer

The Gold Division's break-even sales is closest to:

Correct Answer
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Correct Answer
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Last year, Tinklenberg Corporation's variable costing net operating income was $52,400 and its inventory decreased by 1,400 units.Fixed manufacturing overhead cost was $8 per unit for both units in beginning and in ending inventory.What was the absorption costing net operating income last year?

Correct Answer
verified

The unit product cost under variable costing in Year 1 is closest to:

Correct Answer
verified

Which of the following statements is true?

Correct Answer
verified

The unit product cost under variable costing in Year 1 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

What is the net operating income for the month under variable costing?

Correct Answer
verified

Under absorption costing, the ending inventory for the year would be valued at:

Correct Answer
verified

Exam 7: Variable Costing and Segment Reporting: Tools for Management

Under absorption costing, the unit product cost would be:

Correct AnswerverifiedShow Answer

Under absorption costing, the value of the ending finished goods inventory would be:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Delisa Corporation has two divisions: Division L and Division Q.Data from the most recent month appear below: The break-even in sales dollars for Division Q is closest to:

Correct AnswerverifiedShow Answer

The unit product cost under absorption costing in Year 2 is closest to:

Correct AnswerverifiedShow Answer

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: What is the net operating income for the month under variable costing?

Correct AnswerverifiedShow Answer

The unit product cost under variable costing is:

Correct AnswerverifiedShow Answer

The net operating income (loss) under variable costing in Year 2 is closest to:

Correct AnswerverifiedShow Answer

Correct Answerverified_TB2627_00 a.Bulb Division break-even:S...View AnswerShow Answer

The Gold Division's break-even sales is closest to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Last year, Tinklenberg Corporation's variable costing net operating income was $52,400 and its inventory decreased by 1,400 units.Fixed manufacturing overhead cost was $8 per unit for both units in beginning and in ending inventory.What was the absorption costing net operating income last year?

Correct AnswerverifiedShow Answer

The unit product cost under variable costing in Year 1 is closest to:

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

The unit product cost under variable costing in Year 1 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

What is the net operating income for the month under variable costing?

Correct AnswerverifiedShow Answer

Under absorption costing, the ending inventory for the year would be valued at:

Correct AnswerverifiedShow Answer

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_TB2627_00 a.Bulb Division break-even:
S...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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