6-10 How does Lean Production reduce or eliminate the differencein reported net operating income between absorption and variablecosting?
6-11 What is a segment of an Orgainzation? List several examplesof segments?
6-12 What costs are assigned to a segment under the contributionapproach?
6-13 Distinguish between a traceable cost and a common cost.Give several examples.
6-14 Explain how the segment margin differs from thecontribution margin?
6-10 How does Lean Production reduce or eliminate the differencein reported net operating income between absorption and variablecosting?
6-11 What is a segment of an Orgainzation? List several examplesof segments?
6-12 What costs are assigned to a segment under the contributionapproach?
6-13 Distinguish between a traceable cost and a common cost.Give several examples.
6-14 Explain how the segment margin differs from thecontribution margin?
Related questions
A manufacturing company that produces a single product hasprovided the following data concerning its most recent month ofoperations: |
| Units in beginninginventory | 0 |
| Units produced | 4,400 |
| Units sold | 4,300 |
| Units in endinginventory | 100 |
Variable costs per unit:
| Directmaterials | $ | 49 |
| Direct labor | $ | 51 |
| Variable manufacturingoverhead | $ | 14 |
| Variable selling andadministrative | $ | 12 |
Fixed costs:
| Fixedmanufacturing overhead | $ | 92,400 |
| Fixed selling andadministrative | $ | 43,000 |
What is the variable costing unit product cost for the month?
$126 per unit
$147 per unit
$114 per unit
$127 per unit
A company produces a single product. Variable production costsare $13.3 per unit and variable selling and administrative expensesare $4.3 per unit. Fixed manufacturing overhead totals $49,000 andfixed selling and administration expenses total $53,000. Assuming abeginning inventory of zero, production of 5,300 units and sales of4,250 units, the dollar value of the ending inventory undervariable costing would be: |
$13,965
$23,415
$18,480
$9,450
A manufacturing company that produces a single product hasprovided the following data concerning its most recent month ofoperations: |
| Selling price | $150 |
| Units in beginninginventory | 150 |
| Units produced | 7,300 |
| Units sold | 6,900 |
| Units in endinginventory | 550 |
| Variable cost perunit: | |
| Directmaterials | $48 |
| Direct labor | $43 |
| Variablemanufacturing overhead | $8 |
| Variable selling andadministrative | $4 |
| Fixed costs: | |
| Fixed manufacturingoverhead | $233,600 |
| Fixed selling andadministrative | $82,800 |
What is the total period cost for the month under variablecosting? |
$233,600
$110,400
$316,400
$344,000
A manufacturing company that produces a single product hasprovided the following data concerning its most recent month ofoperations: |
| Selling price | $135 |
| Units in beginninginventory | 0 |
| Units produced | 2,770 |
| Units sold | 2,550 |
| Units in endinginventory | 220 |
| Variable cost perunit: | |
| Directmaterials | $49 |
| Direct labor | $16 |
| Variablemanufacturing overhead | $13 |
| Variable selling andadministrative | $12 |
| Fixed costs: | |
| Fixed manufacturingoverhead | $94,180 |
| Fixed selling andadministrative expenses | $17,850 |
The total gross margin for the month under absorption costingis: |
$58,650
$10,200
$103,950
$114,750
Brummitt Corporation has two divisions: the BAJ Division and theCBB Division. The corporation's net operating income is $11,500.The BAJ Division's divisional segment margin is $80,100 and the CBBDivision's divisional segment margin is $45,500. What is the amountof the common fixed expense not traceable to the individualdivisions? |
$91,600
$114,100
$57,000
$125,600
Quinnett Corporation has two divisions: the Export ProductsDivision and the Business Products Division. The Export ProductsDivision's divisional segment margin is $44,300 and the BusinessProducts Division's divisional segment margin is $96,700. The totalamount of common fixed expenses not traceable to the individualdivisions is $111,600. What is the company's net operatingincome? |
$252,600
$141,000
$29,400
($141,000)
Aaker Corporation, which has only one product, has provided thefollowing data concerning its most recent month of operations: |
| Sellingprice | $167 |
| Units in beginninginventory | 0 |
| Units produced | 7,150 |
| Units sold | 6,850 |
| Units in endinginventory | 300 |
| Variable costs perunit: | |
| Directmaterials | $29 |
| Directlabor | $59 |
| Variablemanufacturing overhead | $23 |
| Variableselling and administrative | $23 |
| Fixed costs: | |
| Fixedmanufacturing overhead | $193,050 |
| Fixedselling and administrative | $29,100 |
What is the unit product cost for the month under variablecosting?
$134 per units
$161 per units
$138 per units
$111 per units
[The following information applies to the questionsdisplayed below.]
Diego Company manufactures one product that is sold for $72 perunit in two geographic regionsâthe East and West regions. Thefollowing information pertains to the companyâs first year ofoperations in which it produced 55,000 units and sold 50,000units. |
| Variablecosts per unit: | ||
| Manufacturing: | ||
| Directmaterials | $ | 23 |
| Direct labor | $ | 14 |
| Variablemanufacturing overhead | $ | 3 |
| Variable sellingand administrative | $ | 5 |
| Fixed costs peryear: | ||
| Fixed manufacturing overhead | $ | 770,000 |
| Fixed selling and administrativeexpenses | $ | 607,000 |
The company sold 37,000 units in the East region and 13,000units in the West region. It determined that $290,000 of its fixedselling and administrative expenses is traceable to the Westregion, $240,000 is traceable to the East region, and the remaining$77,000 is a common fixed cost. The company will continue to incurthe total amount of its fixed manufacturing overhead costs as longas it continues to produce any amount of its only product. |
1.
value:
10.00 points
Required information
| Required: | |
| 1. | What is the unitproduct cost under variable costing? |
2.
value:
10.00 points
Required information
| 2. | What is the unitproduct cost under absorption costing? |
3.
value:
10.00 points
Required information
| 3. | What is thecompanyâs total contribution margin under variable costing? |
References
eBook & Resources
WorksheetLearning Objective: 06-01 Explain howvariable costing differs from absorption costing and compute unitproduct costs under each method.Learning Objective: 06-03 Reconcilevariable costing and absorption costing net operating incomes andexplain why the two amounts differ.
Difficulty: 2 MediumLearning Objective: 06-02Prepare income statements using both variable and absorptioncosting.Learning Objective: 06-04 Prepare a segmented incomestatement that differentiates traceable fixed costs from commonfixed costs and use it to make decisions.
Check my work
4.
value:
10.00 points
Required information
| 4. | What is thecompanyâs net operating income (loss) under variablecosting? |
References
eBook & Resources
WorksheetLearning Objective: 06-01 Explain howvariable costing differs from absorption costing and compute unitproduct costs under each method.Learning Objective: 06-03 Reconcilevariable costing and absorption costing net operating incomes andexplain why the two amounts differ.
Difficulty: 2 MediumLearning Objective: 06-02Prepare income statements using both variable and absorptioncosting.Learning Objective: 06-04 Prepare a segmented incomestatement that differentiates traceable fixed costs from commonfixed costs and use it to make decisions.
Check my work
5.
value:
10.00 points
Required information
| 5. | What is thecompanyâs total gross margin under absorption costing? |
References
eBook & Resources
WorksheetLearning Objective: 06-01 Explain howvariable costing differs from absorption costing and compute unitproduct costs under each method.Learning Objective: 06-03 Reconcilevariable costing and absorption costing net operating incomes andexplain why the two amounts differ.
Difficulty: 2 MediumLearning Objective: 06-02Prepare income statements using both variable and absorptioncosting.Learning Objective: 06-04 Prepare a segmented incomestatement that differentiates traceable fixed costs from commonfixed costs and use it to make decisions.
Check my work
6.
value:
10.00 points
Required information
| 6. | What is thecompanyâs net operating income (loss) under absorptioncosting? |
References
eBook & Resources
WorksheetLearning Objective: 06-01 Explain howvariable costing differs from absorption costing and compute unitproduct costs under each method.Learning Objective: 06-03 Reconcilevariable costing and absorption costing net operating incomes andexplain why the two amounts differ.
Difficulty: 2 MediumLearning Objective: 06-02Prepare income statements using both variable and absorptioncosting.Learning Objective: 06-04 Prepare a segmented incomestatement that differentiates traceable fixed costs from commonfixed costs and use it to make decisions.
Check my work
7.
value:
10.00 points
Required information
| 7. | What is the amountof the difference between the variable costing and absorptioncosting net operating incomes (losses)? |
