Question 1

The contribution margin ratio for Product C is:

Accepted Answer

A)  75%
B)  69%
C)  31%
D)  25%E) None of the above
F) A) and B)

Question 2

What was the absorption costing net operating income this year?

Accepted Answer

A)  $78,100
B)  $95,100
C)  $65,100
D)  $73,600E) B) and D)
F) A) and B)

Question 3

Roy Corporation produces a single product. During July, Roy produced 10,000 units. Costs incurred during the month were as follows:  Under absorption costing, any unsold units would be carried in the inventory account at a unit product cost of:

Accepted Answer

A)  $5.10
B)  $4.40
C)  $3.80
D)  $3.50E) A) and B)
F) C) and D)

Question 4

A manufacturing company that produces a single 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)  $185,000
B)  $117,600
C)  $273,200
D)  $302,600E) All of the above
F) B) and D)

Question 5

UHF Antennas, Inc., produces and sells a unique television antenna. The company has just opened a new plant to manufacture the antenna, and the following cost and revenue data have been reported for the first month of the new plant's operation:  Management is anxious to see how profitable the new antenna will be and has asked that an income statement be prepared for the month. Assume that direct labor is a variable cost.
Required:
a. Assuming that the company uses absorption costing, compute the unit product cost and prepare an income statement.
b. Assuming that the company uses variable costing, compute the unit product cost and prepare an income statement.
c. Explain the reason for any difference in the ending inventories under the two costing methods and the impact of this difference on reported net operating income.

Accepted Answer

a. Unit product cost...

Question 6

The carrying value on the balance sheet of the ending finished goods inventory under absorption costing would be:

Accepted Answer

A)  $16,000
B)  $10,000
C)  $12,000
D)  $21,000E) A) and B)
F) B) and C)

Question 7

The unit product cost under absorption costing is:

Accepted Answer

A)  $92
B)  $228
C)  $182
D)  $85E) B) and C)
F) B) and D)

Question 8

In responsibility accounting, each segment in an organization should be charged with the costs for which it is responsible and over which it has control plus its share of common organizational costs.

Accepted Answer

A) True 
 B)False

Question 9

The total contribution margin for the month under the variable costing approach is:

Accepted Answer

A)  $192,000
B)  $128,000
C)  $72,800
D)  $140,800E) B) and C)
F) A) and D)

Question 10

If the number of units produced exceeds the number of units sold, then net operating income under absorption costing will:

Accepted Answer

A)  be equal to the net operating income under variable costing.
B)  be greater than net operating income under variable costing.
C)  be equal to the net operating income under variable costing plus total fixed manufacturing costs.
D)  be equal to the net operating income under variable costing less total fixed manufacturing costs.E) A) and D)
F) All of the above

Question 11

Over an extended period of time in which the final ending inventories are zero, the accumulated net operating income figures reported under absorption costing will be:

Accepted Answer

A)  greater than those reported under variable costing.
B)  less than those reported under variable costing.
C)  the same as those reported under variable costing.
D)  higher or lower since no generalization can be made.E) A) and B)
F) B) and C)

Question 12

Roberts Company produces a single product. This year, the company's net operating income under absorption costing was $2,000 lower than under variable costing. The company sold 8,000 units during the year, and its variable costs were $8 per unit, of which $2 was variable selling and administrative expense. If production cost was $10 per unit under absorption costing, then how many units did the company produce during the year? (The company produced the same number of units last year.)

Accepted Answer

A)  7,500 units
B)  7,000 units
C)  9,000 units
D)  8,500 unitsE) A) and C)
F) A) and B)

Question 13

What was the absorption costing net operating income last year?

Accepted Answer

A)  $86,200
B)  $89,100
C)  $88,800
D)  $91,400E) A) and D)
F) All of the above

Question 14

The value of the company's inventory on August 31 under the absorption costing method is:

Accepted Answer

A)  $27,000
B)  $42,000
C)  $36,000
D)  $47,000E) A) and B)
F) B) and D)

Question 15

Under variable costing, all variable costs are treated as product costs.

Accepted Answer

A) True 
 B)False

Question 16

What is the unit product cost for the month under variable costing?

Accepted Answer

A)  $99
B)  $81
C)  $106
D)  $88E) None of the above
F) All of the above

Question 17

The variable expenses for the South Area for the year were:

Accepted Answer

A)  $230,000
B)  $185,000
C)  $162,500
D)  $65,000E) A) and D)
F) All of the above

Question 18

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?

Accepted Answer

A)  net operating income would have been $37,100 lower
B)  net operating income would have been $45,800 lower
C)  net operating income would have been $56,000 lower
D)  net operating income would have been $62,000 lowerE) All of the above
F) A) and B)

Question 19

The contribution margin tells us what happens to profits as volume changes if a segment's capacity and fixed costs change as well.

Accepted Answer

A) True 
 B)False

Question 20

What is the total period cost for the month under the absorption costing approach?

Accepted Answer

A)  $104,400
B)  $31,200
C)  $13,000
D)  $135,600E) A) and B)
F) A) and C)

Exam 4: Variable Costing and Segment Reporting: Tools for Management

The variable expenses for the South Area for the year were:

Correct Answer
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The unit product cost under absorption costing is:

Correct Answer
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If the number of units produced exceeds the number of units sold, then net operating income under absorption costing will:

Correct Answer
verified

Over an extended period of time in which the final ending inventories are zero, the accumulated net operating income figures reported under absorption costing will be:

Correct Answer
verified

The carrying value on the balance sheet of the ending finished goods inventory under absorption costing would be:

Correct Answer
verified

What was the absorption costing net operating income last year?

Correct Answer
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What is the unit product cost for the month under variable costing?

Correct Answer
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What is the total period cost for the month under the absorption costing approach?

Correct Answer
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Correct Answer
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The value of the company's inventory on August 31 under the absorption costing method is:

Correct Answer
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Roy Corporation produces a single product. During July, Roy produced 10,000 units. Costs incurred during the month were as follows: Under absorption costing, any unsold units would be carried in the inventory account at a unit product cost of:

Correct Answer
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Correct Answer
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a. Unit product cost...
View Answer

The contribution margin ratio for Product C is:

Correct Answer
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A manufacturing company that produces a single 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

Under variable costing, all variable costs are treated as product costs.

Correct Answer
verified

What was the absorption costing net operating income this year?

Correct Answer
verified

In responsibility accounting, each segment in an organization should be charged with the costs for which it is responsible and over which it has control plus its share of common organizational costs.

Correct Answer
verified

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?

Correct Answer
verified

The total contribution margin for the month under the variable costing approach is:

Correct Answer
verified

The contribution margin tells us what happens to profits as volume changes if a segment's capacity and fixed costs change as well.

Correct Answer
verified

Exam 4: Variable Costing and Segment Reporting: Tools for Management

The variable expenses for the South Area for the year were:

Correct AnswerverifiedShow Answer

The unit product cost under absorption costing is:

Correct AnswerverifiedShow Answer

If the number of units produced exceeds the number of units sold, then net operating income under absorption costing will:

Correct AnswerverifiedShow Answer

Over an extended period of time in which the final ending inventories are zero, the accumulated net operating income figures reported under absorption costing will be:

Correct AnswerverifiedShow Answer

The carrying value on the balance sheet of the ending finished goods inventory under absorption costing would be:

Correct AnswerverifiedShow Answer

What was the absorption costing net operating income last year?

Correct AnswerverifiedShow Answer

What is the unit product cost for the month under variable costing?

Correct AnswerverifiedShow Answer

What is the total period cost for the month under the absorption costing approach?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The value of the company's inventory on August 31 under the absorption costing method is:

Correct AnswerverifiedShow Answer

Roy Corporation produces a single product. During July, Roy produced 10,000 units. Costs incurred during the month were as follows: Under absorption costing, any unsold units would be carried in the inventory account at a unit product cost of:

Correct AnswerverifiedShow Answer

Correct Answerverifieda. Unit product cost...View AnswerShow Answer

The contribution margin ratio for Product C is:

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 total period cost for the month under variable costing?

Correct AnswerverifiedShow Answer

Under variable costing, all variable costs are treated as product costs.

Correct AnswerverifiedShow Answer

What was the absorption costing net operating income this year?

Correct AnswerverifiedShow Answer

In responsibility accounting, each segment in an organization should be charged with the costs for which it is responsible and over which it has control plus its share of common organizational costs.

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

The total contribution margin for the month under the variable costing approach is:

Correct AnswerverifiedShow Answer

The contribution margin tells us what happens to profits as volume changes if a segment's capacity and fixed costs change as well.

Correct AnswerverifiedShow Answer

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a. Unit product cost...
View Answer

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