Exam 8: Absorption and Variable Costing,and Inventory Management

______________ is computed by multiplying the lead time by the difference between the maximum rate of usage and the average rate of usage.

Figure 8-8. Steele Corporation has the following information for January,February,and March 2011: Production costs per unit (based on 10,000 units)are as follows: There were no beginning inventories for January 2011,and all units were sold for $50.Costs are stable over the three months. Refer to Figure 8-8.What is the January ending inventory for Steele Corporation using the variable costing method?

Segment margin is equal to segment sales revenue minus

Figure 8-9. The following information pertains to Stark Corporation: Refer to Figure 8-9.What is the value of ending inventory using the absorption costing method?

The formula for ordering cost is the

Which of the following types of costs does not appear on a variable costing income statement?

Figure 8-5. Sanders Company has the following information for 2011: There were no beginning inventories. Refer to Figure 8-5.What is the income for Eastwood using the variable costing method?

Figure 8-3. Martin Company uses 625 units of a part each year.The cost of placing one order is $8; the cost of carrying one unit in inventory for a year is $4. Refer to Figure 8-3.Martin has decided to begin ordering 40 units at a time.What is the average annual ordering cost of Martin's new policy?

The two major costs associated with inventory are

All of the following costs are included in inventory under absorption costing except