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

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Question 21

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Under variable costing, what is McCoy's net operating income for its first year?

A) $266,000
B) $741,000
C) $1,261,600
D) $2,173,600

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

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Question 22

Multiple Choice

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

A) $69 per unit
B) $65 per unit
C) $85 per unit
D) $81 per unit

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

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Question 23

Multiple Choice

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The unit product cost under absorption costing is closest to:

Qadir Corporation, which has only one product, has provided the following data concerning its most recent month of operations: 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.)

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

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

Petteway Corporation has two divisions: Home Division and Commercial 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 Home Division's break-even in sales dollars? b.What is the Commercial Division's break-even in sales dollars? c.What is the company's overall break-even in sales dollars?

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

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

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

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

Assuming the LIFO inventory flow assumption, when production exceeds sales for the period, absorption costing net operating income will exceed variable costing net operating income.

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

The unit product cost under absorption costing was:

Absorption costing treats all fixed costs as product costs.

The unit product cost under absorption costing is closest to:

Schlenz Inc., which produces a single product, has provided the following data for its most recent month of operation: The company had no beginning or ending inventories. Required: Compute the unit product cost under variable costing.Show your work!

Koff Corporation has two divisions: Garden Division and Farm Division.The following report is for the most recent operating period: Required: a.What is the Garden Division's break-even in sales dollars? b.What is the Farm Division's break-even in sales dollars? c.What is the company's overall break-even in sales dollars? d.What would be the company's overall net operating income if the company operated at its two division's break-even points?

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

The net operating income (loss) under variable costing in Year 1 is closest to: