College Acct 2- Chapter 7

Front

What was Azuki Corporation's overall net operating income for last year?

Back

$28,000

Front

In the context of cost accounting, what is the difference between absorption costing and variable costing?

Back

Absorption costing includes direct materials, direct labor, and both variable and fixed manufacturing overhead as product costs, while variable costing includes only direct materials, direct labor, and variable manufacturing overhead as product costs.

Front

What is a potential risk of allocating common fixed expenses to business segments?

Back

It may lead to incorrect decisions about discontinuing segments.

Front

What is the amount of the common fixed expense not traceable to the individual divisions of Uchimura Corporation, given the net operating income of $32,000, AFE Division's segment margin of $12,500, and GBI Division's segment margin of $175,400?

Back

$155,900

Front

Under which condition will net operating income be the same for both variable and absorption costing? Options: When production is less than sales, When production and sales are equal, When production exceeds sales, When there is no beginning inventory.

Back

When production and sales are equal.

Front

Which costing method considers only variable costs for product costing (treats ALL fixed as period costs)?

Back

variable costing.

Front

Hayworth Corporation is considering discontinuing one of its product lines. The CFO wants to understand the impact on the company's overall profitability. Which figure should the CFO examine to assess the effect of discontinuing the product line on the company's net operating income? Options: the product line's segment margin minus an allocated portion of common fixed expenses, the product line's sales revenue, the product line's contribution margin, the product line's segment margin

Back

the product line's segment margin

Front

In a segmented income statement, how is the break-even point in dollar sales for a segment calculated? Options: Dividing common fixed expenses by the segment's contribution margin ratio, Dividing traceable fixed expenses by the segment's contribution margin ratio, Dividing total fixed expenses by the segment's contribution margin ratio, Dividing non-traceable fixed expenses by the segment's contribution margin ratio

Back

Dividing traceable fixed expenses by the segment's contribution margin ratio

Front

A company produces a single product. Variable production costs are $26 per unit and variable selling and administrative expenses are $4 per unit. Fixed manufacturing overhead totals $30,000 and fixed selling and administration expenses total $36,000. Assuming a beginning inventory of zero, production of 6,000 units and sales of 5,800 units, what is the dollar value of the ending inventory under variable costing?

Back

$5,200

Front

What is the absorption costing unit product cost if the number of units produced each year is 7,000, with variable costs per unit as follows: Direct materials $48, Direct labor $10, Variable MOH $2, Variable selling & admin expense $5, and fixed costs per year as Fixed MOH $441,000 and Fixed S&A $112,000?

Back

$123 per unit