Question 1

Nauman Company has the following information pertaining to its two divisions for 2011:  Common expenses are $24,000 for 2011.
-
What is the net income for Nauman Company?

Accepted Answer

The answer of Nauman Company has the following information pertaining...

Question 2

Grass Valley Mining mines three products.Gold ore sells for $1,000 per ton, variable costs are $600 per ton, and fixed mining costs are $250,000.The segment margin for 2011 was $(100,000).The management of Grass Valley Mining was considering dropping the mining of gold ore.Only one-half of the fixed expenses are direct and would be eliminated if the segment was dropped. What were the sales (in tons) for 2011?

Accepted Answer

The segment margin is equal to sales minus variable costs minus fixed costs. So, $100,000 = sales - $600 per ton * tons - $250,000. Since only half of the fixed costs are direct, the fixed costs that would be eliminated if the segment were dropped are $250,000 * 1/2 = $125,000. So, $100,000 = sales - $600 per ton * tons - $125,000. Solving for sales, we get sales = $600 per ton * tons + $225,000. Since the selling price is $1,000 per ton, we have $1,000 per ton * tons = $600 per ton * tons + $225,000. Solving for tons, we get tons = 375 tons.

Question 3

Franklin Company's expected sales were 2,000 units at $100 per unit.During 2011, it had actual sales of 1,800 units at $110 per unit.Budgeted variable costs were $60 per unit. What is Franklin's total sales variance?

Accepted Answer

The answer of Franklin Company's expected sales were 2,000 units...

Question 4

The following information pertains to Stark Corporation:  Absorption costing net income would be _______________ the variable costing net income.

Accepted Answer

The answer of The following information pertains to Stark Corporation:...

Question 5

Common segment costs, when contrasted with direct segment costs, are

Accepted Answer

Common segment costs are costs that are related to more than one segment and not directly traceable to a particular segment, as well as costs incurred at one level for the benefit of two or more segments. These costs are different from direct segment costs, which are specifically allocated to a single segment.

Question 6

Assume the following information for a product line: 
- What is the contribution margin of the product line?

Accepted Answer

The answer of Assume the following information for a product...

Question 7

The sales price variance is created by a difference between

Accepted Answer

The sales price variance is the difference between the actual selling price and the expected selling price. It helps in analyzing the reasons for the difference and taking corrective actions. The other options do not relate to the sales price variance.

Question 8

Assume the following information for a product line:  
-What is the segment margin of the product line?

Accepted Answer

The answer of Assume the following information for a product...

Question 9

Redding Company has two divisions with the following segment margins for the current year: Northern, $200,000; Southern, $400,000.Common expenses of the company are $50,000.What is Redding Company's net income?

Accepted Answer

Net income of Redding Company is calculated as the sum of segment margins less common expenses. 
Net income = Northern segment margin + Southern segment margin - common expenses 
Net income= $200,000 + $400,000 - $50,000 
Net income= $550,000

Question 10

Consider the following portion of a segmented income statement for the year just ended.Assume that the fixed expenses of Division X include $30,000 of direct expenses and that the discontinuance of the department will not affect the sales of the other departments nor reduce the common expenses.  What is X's divisional segment margin?

Accepted Answer

The answer of Consider the following portion of a segmented...

Question 11

Consider the following portion of a segmented income statement for the year just ended.Assume that the fixed expenses of Division X include $30,000 of direct expenses and that the discontinuance of the department will not affect the sales of the other departments nor reduce the common expenses.  What would be the effect on the firm's operating income if Division X were discontinued?

Accepted Answer

The answer of Consider the following portion of a segmented...

Question 12

Barmore Company has the following information pertaining to its two divisions for 2011:  Common expenses are $12,000 for 2011.
-
What is the segment margin for Division B?

Accepted Answer

The answer of Barmore Company has the following information pertaining...

Question 13

Taylor Company's budgeted sales were 10,000 units at $200 per unit.Actual sales were 9,200 units at $210 per unit. Taylor's price volume variance is

Accepted Answer

The answer of Taylor Company's budgeted sales were 10,000 units...

Question 14

Barmore Company has the following information pertaining to its two divisions for 2011:  Common expenses are $12,000 for 2011.
-
What is the net income for Barmore Company?

Accepted Answer

The net income of Division X is $250,000 ($350,000 - $100,000), and the net income of Division Y is $70,000 ($100,000 - $30,000). Therefore, the total net income for the company is $320,000 ($250,000 + $70,000), and subtracting the common expenses of $12,000 gives a final net income of $308,000. The answer choice that is closest to this number is B ($20,500 off). The other answer choices are significantly off and can be eliminated.

Question 15

Division B earns a contribution margin of $200,000 and has a divisional margin of $70,000.If Division B is closed, all of the direct divisional expenses and $110,000 of common expenses can be eliminated.These facts indicate that closing the division will cause the firm's operating income to

Accepted Answer

The answer of Division B earns a contribution margin of...

Question 16

Which of the following could be considered a segment?

Accepted Answer

All of these options could be considered as a segment in business. A division refers to a subgroup within a company that focuses on a specific function or product. A product-line refers to a group of related products that a company offers. Sales territory refers to a geographic area assigned to a salesperson or team for selling products or services. Therefore, all three options can be considered as segments in a business.

Question 17

The market share variance is calculated by

Accepted Answer

The market share variance is the difference between the actual market share percentage and the budgeted market share percentage, multiplied by the actual industry sales in units, and then multiplied by the budgeted average unit contribution margin. Therefore, option B is the correct choice as it uses this formula to calculate the variance. Options A, C, and D are incorrect as they do not use the correct formula to calculate the market share variance.

Question 18

The following information pertains to Stark Corporation:  What is the value of ending inventory using the absorption costing method?

Accepted Answer

The answer of The following information pertains to Stark Corporation:...

Question 19

Nauman Company has the following information pertaining to its two divisions for 2011:  Common expenses are $24,000 for 2011.
-
What is the segment margin for Division Y?

Accepted Answer

The answer of Nauman Company has the following information pertaining...

Question 20

Taylor Company's budgeted sales were 10,000 units at $200 per unit.Actual sales were 9,200 units at $210 per unit. Taylor's sales price variance is

Accepted Answer

Sales price variance = (Actual price - Budgeted price) x Actual quantity sold

= ($210 - $200) x 9,200

= $92,000 (F)

Quiz 18: Pricing and Profitability Analysis

Nauman Company has the following information pertaining to its two divisions for 2011: Common expenses are $24,000 for 2011. - What is the net income for Nauman Company?

Franklin Company's expected sales were 2,000 units at $100 per unit.During 2011, it had actual sales of 1,800 units at $110 per unit.Budgeted variable costs were $60 per unit. What is Franklin's total sales variance?

The following information pertains to Stark Corporation: Absorption costing net income would be _______________ the variable costing net income.

Common segment costs, when contrasted with direct segment costs, are

Assume the following information for a product line: - What is the contribution margin of the product line?

The sales price variance is created by a difference between

Assume the following information for a product line: -What is the segment margin of the product line?

Redding Company has two divisions with the following segment margins for the current year: Northern, $200,000; Southern, $400,000.Common expenses of the company are $50,000.What is Redding Company's net income?

Barmore Company has the following information pertaining to its two divisions for 2011: Common expenses are $12,000 for 2011. - What is the segment margin for Division B?

Taylor Company's budgeted sales were 10,000 units at $200 per unit.Actual sales were 9,200 units at $210 per unit. Taylor's price volume variance is

Barmore Company has the following information pertaining to its two divisions for 2011: Common expenses are $12,000 for 2011. - What is the net income for Barmore Company?

Division B earns a contribution margin of $200,000 and has a divisional margin of $70,000.If Division B is closed, all of the direct divisional expenses and $110,000 of common expenses can be eliminated.These facts indicate that closing the division will cause the firm's operating income to

Which of the following could be considered a segment?

The market share variance is calculated by

The following information pertains to Stark Corporation: What is the value of ending inventory using the absorption costing method?

Nauman Company has the following information pertaining to its two divisions for 2011: Common expenses are $24,000 for 2011. - What is the segment margin for Division Y?

Taylor Company's budgeted sales were 10,000 units at $200 per unit.Actual sales were 9,200 units at $210 per unit. Taylor's sales price variance is