Assuming that a segment has both variable expenses and traceable fixed expenses, an increase in sales should increase profits by an amount equal to the sales times the segment margin ratio.

A) True

B) False

2. A segment is any portion or activity of an organization about which a manager seeks revenue, cost, or profit data.

A) True

B) False

3. A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:

Selling	$135
Units in beg inventory	0
Units produced	5,000
Units Sold	4,900
Units in ending inventory	100
Variable Cost/unit
DM	$33
DL	$34
Variable MOH	$4
Variable selling and adminstration	$6
Fixed Costs:
Fixed MOH	$185,000
Fixed selling and adminstration	$88,200

What is the total period cost for the month under variable costing?

A) $185,000 B) $117,600 C) $273,200 D) $302,600

4. Which of the following are considered to be product costs under variable costing?

I. Variable manufacturing overhead.

II. Fixed manufacturing overhead.

III. Selling and administrative expenses.

A) I.

B) I and II.

C) I and III.

D) I, II, and III.

5. Abe Company, which has only one product, has provided the following data concerning its most recent month of operations:

Selling $	$126
Units in beg inventory	0
Units produced	8,700
Units Sold	8,400
Units in ending inventory	300
Variable Cost/unit
Dm	$ 30
DL	$ 48
Variable MOH	$ 3
Variable selling and adminstration	$ 7
Fixed Costs:
Fixed MOH	$ 156,600
Fixed selling and adminstration	$ 151,200

What is the unit product cost for the month under variable costing?

A) $99

B) $81

C) $106

D) $88

6. Cockriel Inc., which produces a single product, has provided the following data for its most recent month of operations:

# of units produced	8,000
Variable cost/unit
DM	$14
DL	$22
variable MOH	$1
Variable selling and admin	$6
Fixed Costs
Fixed MOH	$88,000
Fixed selling and adminstration	$ 608,000

There were no beginning or ending inventories. The variable costing unit product cost was:

A) $42 B) $43 C) $37 D) $48

7. Tsuchiya Corporation manufactures a variety of products. Last year, the company's variable costing net operating income was $57,500. Fixed manufacturing overhead costs deferred in inventory under absorption costing amounted to $35,400. What was the absorption costing net operating income last year?

A) $22,100 B) $35,400 C) $57,500 D) $92,900

8. Fahey Company manufactures a single product that it sells for $25 per unit. The company has the following cost structure: There were no units in beginning inventory. During the year, 18,000 units were produced and 15,000 units were sold. Under absorption costing, the unit product cost is:

Variable Cost per Unit
Manufacturing	$ 9
Selling and admin	$ 3
Fixed Costs in total
Manufacturing	$ 72,000
Selling and admin	$ 54,000

A) $9 B) $12 C) $13 D) $16