*Amazon 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?

Select one:

a.

($34,200)

b.

$201,300

c.

$609,900

d.

$374,400

*Amazon has two major business segments: Consumer and Commercial. Data for the segments and for the company for March appear below:

Sales revenues, Consumer	$	680,000
Sales revenues, Commercial	$	280,000
Variable expenses, Consumer	$	394,000
Variable expenses, Commercial	$	143,000
Traceable fixed expenses, Consumer	$	102,000
Traceable fixed expenses, Commercial	$	45,000

In addition, common fixed expenses totaled $210,000 and were allocated as follows: $122,000 to the Consumer business segment and $88,000 to the Commercial business segment. A properly constructed segmented income statement in a contribution format would show that the segment margin of the Consumer business segment is:

Select one:

a.

$164,000

b.

$184,000

c.

$62,000

d.

$394,000

*Amazon uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system:

Activity Cost Pool (and Activity Measure)	Total Cost
Machine related (machine-hours)	$	137,600
Batch setup (setups)	$	532,800
General factory (direct labor-hours)	$	105,300

Total Activity

Activity Cost Pools	Product X	Product Y	Total
Machine related	1,000	7,000	8,000
Batch setup	3,000	5,000	8,000
General factory	7,000	2,000	9,000

The activity rate for the batch setup activity cost pool is closest to:

Select one:

a.

$66.60

b.

$177.60

c.

$106.60

d.

$97.00

*Amazon manufactures a computer monitor. Shown below is Amazon's cost structure:

	Variable cost per monitor		Total fixed cost for the year
Manufacturing cost	$	75.20	$	912,000
Selling and administrative	$	14.60	$	456,000

In its first year of operations, Amazon produced 100,000 monitors but only sold 95,000. Amazon's gross margin in this first year was $2,629,600. Amazon's contribution margin in this first year was $2,109,000. Under absorption costing, what is Amazon's net operating income for its first year?

Select one:

a.

$266,000

b.

$1,261,600

c.

$786,600

d.

$2,173,600

*Amazon uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools--Machining, Order Filling, and Other. The costs in those activity cost pools appear below:

Machining	$	20,900
Order Filling	$	22,900
Other	$	29,200

Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data appear below:

	MHs (Machining)	Orders (Order Filling)
Product U6	9,600	600
Product Z8	400	400

Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.

	Product U6		Product Z8
Sales (total)	$	185,100	$	178,100
Direct materials (total)	$	56,600	$	98,600
Direct labor (total)	$	83,400	$	63,700

What is the product margin for Product U6 under activity-based costing?

Select one:

a.

$45,100

b.

$11,296

c.

$8,600

d.

$25,036