Question

Wyrich Corporation has two divisions: Blue Division and Gold Division. The following report is for the...

Wyrich Corporation has two divisions: Blue Division and Gold Division. The following report is for the most recent operating period:

 Total Company Blue Division Gold Division Sales \$ 522,000 \$ 391,000 \$ 131,000 Variable expenses 160,670 89,930 70,740 Contribution margin 361,330 301,070 60,260 Traceable fixed expenses 286,000 239,000 47,000 Segment margin 75,330 \$ 62,070 \$ 13,260 Common fixed expenses 73,080 Net operating income \$ 2,250

The Blue Division’s break-even sales is closest to:

Multiple Choice

a) \$310,390

b) \$518,750

c) \$381,481

d) \$405,299

1b) Ing Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

 Selling price \$ 159 Units in beginning inventory 0 Units produced 7,800 Units sold 7,700 Units in ending inventory 100
 Variable costs per unit: Direct materials \$ 47 Direct labor \$ 50 Variable manufacturing overhead \$ 2 Variable selling and administrative expense \$ 9 Fixed costs: Fixed manufacturing overhead \$ 304,200 Fixed selling and administrative expense \$ 84,700

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

Multiple Choice

a) \$99 per unit

b) \$108 per unit

c) \$147 per unit

d) \$138 per unit

1) The Blue-Division break-even sales is a. \$310,390

Segment CM Ratio = Contribution margin ÷ segment sales = \$301,070 ÷ \$391,000 = 0.770

The break even sales = traceable fixed expenses ÷ segment CM Ratio = \$239,000 ÷ 0.770 = \$310,390

CM = Contribution margin

Contribution margin of blue - division = \$301,070

Sales of blue division is \$391,000

Traceable fixed expense of blue division is \$239,000

2) the unit product cost is a. \$99.

UNIT PRODUCT COST

= direct material + direct labour + variable manufacturing overhead = \$47 + \$50 + \$2 = \$99

NOTE : - variable selling and administrative expenses is not considered in unit product cost.

In variable costing fixed cost is not considered.

Earn Coins

Coins can be redeemed for fabulous gifts.