Exam 8: Alternative Inventory Costing Methods: a Decision-Making Perspective

Using normal costing to cost units of productions, Steven Harper Co.has gathered the following information: Fixed manufacturing overhead was estimated to be $120,000 for the year. Actual production was 40,000 units. Actual fixed manufacturing overhead costs incurred were $125,000. What is the result of this difference between the estimated fixed overhead and actual fixed overhead?

When units produced exceed units sold, income under absorption costing is higher than income under variable costing.

The difference between absorption costing and variable costing is the treatment of fixed manufacturing overhead.

In full or absorption costing, all manufacturing costs are charged to the product.

Which of the following terms would be found on an Income Statement using variable costing?

Which of the following statements about absorption costing is true?

Under absorption costing when inventory increases in a year,

Under absorption costing