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1. Allocating common fixed expenses to business segments: a. may cause managers to erroneously discontinue business segments. b. may cause managers to erroneously keep business

1.

Allocating common fixed expenses to business segments:

a. may cause managers to erroneously discontinue business segments.

b. may cause managers to erroneously keep business segments that should be dropped.

c. ensures that all costs are covered.

d. helps managers make good decisions.

2.

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

Selling price $ 118
Units in beginning inventory 400
Units produced 2,100
Units sold 2,300
Units in ending inventory 200

Variable costs per unit:
Direct materials $ 37
Direct labor $ 23
Variable manufacturing overhead $ 3
Variable selling and administrative expense $ 5
Fixed costs:
Fixed manufacturing overhead $ 73,500
Fixed selling and administrative expense $ 29,900

The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month.

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

3.

Neef Corporation has provided the following data for its two most recent years of operation:

Selling price per unit $ 84
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials $ 12
Direct labor $ 5
Variable manufacturing overhead $ 4
Fixed manufacturing overhead per year $

432,000

Selling and administrative expenses:
Variable selling and administrative expense per unit sold $ 5
Fixed selling and administrative expense per year $ 61,000
Year 1 Year 2
Units in beginning inventory 0 3,000
Units produced 12,000 9,000
Units sold 9,000 10,000
Units in ending inventory 3,000 2,0000

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

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