Exam 8: Absorption and Variable Costing, and Inventory Management

MATCHING Match the type of income statement to the costs it includes. a. Variable costing income statement b. Absorption costing income statement c. Both types of income statements -Fixed selling expense

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

Which of the following types of costs is a product cost for absorption costing but a period cost for variable costing?

Figure 8-4. The following information pertains to Mayberry Corporation: -Refer to Figure 8-4. What is the value of the ending inventory using the absorption costing method?

The inventory cost that can include processing costs, cost of insurance for shipping, and unloading is called

Simon Company sells 900 units of its deluxe product each year. The cost of setting up for one production run is $150; the cost of carrying one unit in inventory for a year is $3.

Laird Company uses 405 units of a part each year. The cost of placing one order is $5; the cost of carrying one unit in inventory for a year is $2. Laird currently orders 81 units at a time.

Figure 8-12. Assume the following information for a product line: -Refer to Figure 8-12. What is the segment margin of the product line?

Gross margin is to absorption costing as ____ is to variable costing.

Inventory values calculated using variable costing as opposed to absorption costing will generally be

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?

Inventory under absorption costing includes only direct materials and direct labor.

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

Which of the following could be considered a segment?

On a segmented income statement, fixed expenses are broken down into _____________ and ______________.

The _______________ income statement groups expenses according to cost behavior.

When production is less than sales volume, income under absorption costing will be ____ income using variable costing procedures.

Figure 8-2. Loring Company had the following data for the month: Fixed overhead is $4,000 per month; it is applied to production based on normal activity of 2,000 units. During the month, 2,000 units were produced. Loring started the month with 300 units in beginning inventory, with unit product cost equal to this month's unit product cost. A total of 2,100 units were sold during the month at price of $14. Selling and administrative expense for the month, all fixed, totaled $3,600. -Refer to Figure 8-2. What is operating income under variable costing?

MATCHING Match the type of income statement to the costs it includes. a. Variable costing income statement b. Absorption costing income statement c. Both types of income statements -Administrative expense

Figure 8-9. The following information pertains to Stark Corporation: -Refer to Figure 8-9. Absorption costing income would be ____ the variable costing income.