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Module 3 Quiz
Module 3 Quiz
Costs classified as batch-level costs should depend on the number of batches processed rather than on the number of units produced, the number of units sold, or other measures of volume. True False
A. Setting up equipment.
C. Training employees.
Allocating common fixed costs to segments on segmented income statements reduces the usefulness of such statements. True False
The impact on net operating income of short-run changes in sales for a segment can be most clearly predicted by analyzing:
In activity-based costing, some manufacturing costs may be excluded from product costs. True False
Activity-based costing is a costing method that is designed to provide managers with product cost information for external financial reports. True False
A. Unit-level activity.
B. Batch-level activity.
C. Product-level activity.
D. Organization-sustaining activity. Younie Corporation has two divisions: the South Division and the West Division. The corporation's net operating income is $26,900. The South Division's divisional segment margin is $42,800 and the West Division's divisional segment margin is $29,900. What is the amount of the common fixed expense not traceable to the individual divisions?
A. $56,800.
B. $69,700.
C. $72,700.
D. $45,800.
A segment is any part or activity of an organization about which a manager seeks cost, revenue, or profit data. True False
Dukelow Corporation has two divisions: the Governmental Products Division and the Export Products Division. The Governmental Products Division's divisional segment margin is $255,000 and the Export Products Division's divisional segment margin is $59,800. The total amount of common fixed expenses not traceable to the individual divisions is $163,700. What is the company's net operating income?
A. $314,800
B. ($314,800)
C. $151,100
D. $478,500
A segment of a business responsible for both revenues and expenses would be called:
A. A cost center.
B.
An investment center.
C. A profit center.
D. Residual income.
A responsibility center is a business segment whose manager has control over costs, revenues, or investments in operating assets. True False
Miscavage Corporation has two divisions: the Beta Division and the Alpha Division. The Beta Division has sales of $580,000, variable expenses of $301,600, and traceable fixed expenses of $186,500. The Alpha Division has sales of $510,000, variable expenses of $178,500, and traceable fixed expenses of $222,100. The total amount of common fixed expenses not traceable to the individual divisions is $235,500. What is the company's net operating income?
A. $374,400.
B. $201,300.
C. $609,900.
D. ($34,200).
Uchimura Corporation has two divisions: the AFE Division and the GBI Division. The corporation's net operating income is $42,000. The AFE Division's divisional segment margin is $15,700 and the GBI Division's divisional segment margin is $175,400. What is the amount of the common fixed expense not traceable to the individual divisions?
A. $149,100.
B. $57,700.
C. $217,400.
D. $191,100
An activity-based costing system that is designed for internal decision-making will not conform to generally accepted accounting principles because:
A. some manufacturing costs (i.e., the costs of idle capacity and organization-sustaining costs) will not be assigned to products.
B.
D. all of the above are reasons why an activity-based costing system that is designed for internal decision-making will not conform to generally accepted accounting principles. In order to properly report segment margin as a guide to long-run segment profitability and performance, fixed costs must be separated into two broad categories. One category is common fixed costs. What is the other category?
In a segmented contribution format income statement, what is the best measure of the long-run profitability of a segment?
Allocating common fixed costs to segments on segmented income statements reduces the usefulness of such statements. True False
The impact on net operating income of short-run changes in sales for a segment can be most clearly predicted by analyzing:
C.
J Corporation has two divisions. Division A has a contribution margin of $79,300 and Division B has a contribution margin of $126,200. If total traceable fixed costs are $72,400 and total common fixed costs are $34,900, what is J Corporation's net operating income?
A. $168,000.
B. $170,600.
C. $133,100.
D. $98,200.