1. Neelon Corporation has two divisions: Southern Division and Northern Division
ID: 2333358 • Letter: 1
Question
1. Neelon Corporation has two divisions: Southern Division and Northern Division. The following data are for the most recent operating period:
sales
The common fixed expenses have been allocated to the divisions on the basis of sales.
The Northern Division’s break-even sales is closest to:
2. Data for January for Bondi Corporation and its two major business segments, North and South, appear below:
Sales revenues, North $ 640,000
Variable expenses, North $ 371,300
Traceable fixed expenses, North $ 76,500
Sales revenues, South $ 493,900 Variable expenses, South $ 281,800
Traceable fixed expenses, South $ 63,900
In addition, common fixed expenses totaled $173,300 and were allocated as follows: $90,000 to the North business segment and $83,300 to the South business segment. A properly constructed segmented income statement in a contribution format would show that the segment margin of the North business segment is:
3. A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:
Selling price $ 140
Units in beginning inventory 0
Units produced 3,150
Units sold 2,760
Units in ending inventory 390
Variable costs per unit:
Direct materials $ 47
Direct labor $ 18
Variable manufacturing overhead $ 10
Variable selling and administrative expense $ 19
Fixed costs:
Fixed manufacturing overhead $ 107,100
Fixed selling and administrative expense $ 24,840
The total gross margin for the month under absorption costing is:
4. Farris Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
Selling price $ 116
Units in beginning inventory 0
Units produced 9,000
Units sold 8,600
Units in ending inventory 400
Variable costs per unit:
Direct materials $ 19
Direct labor $ 61
Variable manufacturing overhead $ 7
Variable selling and administrative expense $ 11
Fixed costs:
Fixed manufacturing overhead $ 135,000
Fixed selling and administrative expense $ 8,900
What is the net operating income for the month under absorption costing?
5. Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
Selling price $ 99
Units in beginning inventory 0
Units produced 4,800
Units sold 4,030
Units in ending inventory 770
Variable costs per unit:
Direct materials $ 20
Direct labor $ 40
Variable manufacturing overhead $ 6
Variable selling and administrative expense $ 4
Fixed costs:
Fixed manufacturing overhead $ 54,900
Fixed selling and administrative expense $ 3,500
The total contribution margin for the month under variable costing is:
sales
total company 341700 souther division 212300 northern division 129400 variable expense 118766 72182 46584 traceble fixed expenses 168400 70300 98100 common fixed expense 68340 42460 25880Explanation / Answer
Solution 1:
Contribution margin for northern division = Sales - Variable cost = $129,400 - $46,584 = $82,816
Contribution margin ratio = $82,816 / $129,400 = 64%
Total fixed expense for northern division = $98,100 + $25,880 = $123,980
Breakeven sales of northern division = Fixed expenses / contribution margin ratio
= $123,980 / 64%
= $193,719
Solution 2:
Segmant margin for north business segment is $192,200
Solution 3:
Solution 4:
Solution 5:
Selling price per unit = $99
Variable cost per unit = $20 + $40 + $6 + $4 = $70
Contriubtion margin per unit = $99 - $70 = $29
Nos of unit sold = 4030
Total contribution margin for the month = 4030 * $29 = $116,870
Segmented income statement Particulars Total North South Sales Revenue $1,133,900.00 $640,000.00 $493,900.00 Variable Expenses $653,100.00 $371,300.00 $281,800.00 Contribution margin $480,800.00 $268,700.00 $212,100.00 Traceable fixed expenses $140,400.00 $76,500.00 $63,900.00 Segment Income $340,400.00 $192,200.00 $148,200.00 Common fixed expenses $173,300.00 Net Income $167,100.00Related Questions
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