Question 1

Under variable costing, which of the following costs would not be included in finished goods inventory?

Accepted Answer

A)  wages of machine operator 
B)  steel costs for a machine tool manufacturer 
C)  salary of factory supervisor 
D)  electricity used by factory machinery 
A)  wages of machine operator 
B)  steel costs for a machine tool manufacturer 
C)  salary of factory supervisor 
D)  electricity used by factory machinery

Question 2

In the contribution margin analysis, the effect of a change in the number of units sold, assuming no change in unit sales price or unit cost, is referred to as the:

Accepted Answer

A)  sales factor 
B)  cost of goods sold factor 
C)  quantity factor 
D)  price factor 
A)  sales factor 
B)  cost of goods sold factor 
C)  quantity factor 
D)  price factor

Question 3

The factory superintendent's salary would be included as part of the cost of products manufactured under the absorption costing concept.

Accepted Answer

A) True 
 B)False

Question 4

The taxes on the factory superintendent's salary would be included as part of the cost of products manufactured under the variable costing concept.

Accepted Answer

A) True 
 B)False

Question 5

Under absorption costing, which of the following costs would not be included in finished goods inventory?

Accepted Answer

A)  direct labor cost 
B)  direct materials cost 
C)  variable and fixed factory overhead cost 
D)  variable and fixed selling and administrative expenses 
A)  direct labor cost 
B)  direct materials cost 
C)  variable and fixed factory overhead cost 
D)  variable and fixed selling and administrative expenses

Question 6

MATCHING
-Treats fixed manufacturing cost as a period cost.

Accepted Answer

A) Absorption costing only 
B) Variable costing only 
C) Both absorption and variable costing 
A) Absorption costing only 
B) Variable costing only 
C) Both absorption and variable costing

Question 7

For a supervisor of a manufacturing department, which of the following costs is controllable?

Accepted Answer

A)  direct materials 
B)  insurance on factory building 
C)  depreciation of factory building 
D)  sales salaries 
A)  direct materials 
B)  insurance on factory building 
C)  depreciation of factory building 
D)  sales salaries

Question 8

A business operated at 100% of capacity during its first month and incurred the following costs:   If 75 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the absorption costing balance sheet?

Accepted Answer

A)  $5,625 
B)  $5,250 
C)  $5,760 
D)  $6,210 
A)  $5,625 
B)  $5,250 
C)  $5,760 
D)  $6,210

Question 9

A business operated at 100% of capacity during its first month, with the following results:   Operating expenses:  
-What is the amount of the gross profit that would be reported on the absorption costing income statement?

Accepted Answer

A)  $21,000 
B)  $18,900 
C)  $27,900 
D)  $18,000 
A)  $21,000 
B)  $18,900 
C)  $27,900 
D)  $18,000

Question 10

A business operated at 100% of capacity during its first month, with the following results:   Operating expenses:  
-What is the amount of the income from operations that would be reported on the variable costing income statement?

Accepted Answer

A)  $18,900 
B)  $18,200 
C)  $18,000 
D)  $21,000 
A)  $18,900 
B)  $18,200 
C)  $18,000 
D)  $21,000

Question 11

The absorption costing income statement does not distinguish between variable and fixed costs.

Accepted Answer

A) True 
 B)False

Question 12

If the ability to sell and the amount of production facilities devoted to each of two products is equal, it is profitable to increase the sales of that product with the highest contribution margin.

Accepted Answer

A) True 
 B)False

Question 13

The actual price for a product was $50 per unit, while the planned price was $44 per unit. The volume increased by 4,000 to 60,000 total units. Determine a) the quantity factor and b) the price factor for sales.

Accepted Answer

​
a)$176,000 increas

Question 14

MATCHING
-Generally provides the most useful report for setting long-term prices.

Accepted Answer

A) Absorption costing only 
B) Variable costing only 
C) Both absorption and variable costing 
A) Absorption costing only 
B) Variable costing only 
C) Both absorption and variable costing

Question 15

For a period during which the quantity of product manufactured equals the quantity sold, income from operations reported under absorption costing will be smaller than the income from operations reported under variable costing.

Accepted Answer

A) True 
 B)False

Question 16

In determining cost of goods sold, two alternate costing concepts can be used: direct costing and variable costing.

Accepted Answer

A) True 
 B)False

Question 17

In the long run, for a business to remain in operation, the revenues from products sold should normally cover all costs and expenses and provide a reasonable income.

Accepted Answer

A) True 
 B)False

Question 18

In the absorption costing income statement, deduction of the cost of goods sold from sales yields gross profit.

Accepted Answer

A) True 
 B)False

Question 19

On the variable costing income statement, variable selling and administrative expenses are deducted from manufacturing margin to yield contribution margin.

Accepted Answer

A) True 
 B)False

Question 20

A business operated at 100% of capacity during its first month and incurred the following costs:   If 2,000 units remain unsold at the end of the month and sales total $300,000 for the month, what is the amount of the manufacturing margin that would be reported on the variable costing income statement?

Accepted Answer

A)  $104,000 
B)  $106,000 
C)  $140,000 
D)  not reported 
A)  $104,000 
B)  $106,000 
C)  $140,000 
D)  not reported

Exam 20: Variable Costing for Management Analysis

Under variable costing, which of the following costs would not be included in finished goods inventory?

In the contribution margin analysis, the effect of a change in the number of units sold, assuming no change in unit sales price or unit cost, is referred to as the:

The factory superintendent's salary would be included as part of the cost of products manufactured under the absorption costing concept.

The taxes on the factory superintendent's salary would be included as part of the cost of products manufactured under the variable costing concept.

Under absorption costing, which of the following costs would not be included in finished goods inventory?

MATCHING -Treats fixed manufacturing cost as a period cost.

For a supervisor of a manufacturing department, which of the following costs is controllable?

A business operated at 100% of capacity during its first month and incurred the following costs: If 75 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the absorption costing balance sheet?

A business operated at 100% of capacity during its first month, with the following results: Operating expenses: -What is the amount of the gross profit that would be reported on the absorption costing income statement?

A business operated at 100% of capacity during its first month, with the following results: Operating expenses: -What is the amount of the income from operations that would be reported on the variable costing income statement?

The absorption costing income statement does not distinguish between variable and fixed costs.

If the ability to sell and the amount of production facilities devoted to each of two products is equal, it is profitable to increase the sales of that product with the highest contribution margin.

The actual price for a product was $50 per unit, while the planned price was $44 per unit. The volume increased by 4,000 to 60,000 total units. Determine a) the quantity factor and b) the price factor for sales.

MATCHING -Generally provides the most useful report for setting long-term prices.

For a period during which the quantity of product manufactured equals the quantity sold, income from operations reported under absorption costing will be smaller than the income from operations reported under variable costing.

In determining cost of goods sold, two alternate costing concepts can be used: direct costing and variable costing.

In the long run, for a business to remain in operation, the revenues from products sold should normally cover all costs and expenses and provide a reasonable income.

In the absorption costing income statement, deduction of the cost of goods sold from sales yields gross profit.

On the variable costing income statement, variable selling and administrative expenses are deducted from manufacturing margin to yield contribution margin.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

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