Question 1

Which of the following statements is true?

Accepted Answer

A)  Under variable costing, direct materials and direct labor are expensed as period expenses. 
B)  Under variable costing, fixed manufacturing overhead is expensed as period expenses. 
C)  Fixed manufacturing overhead costs are treated the same under both absorption costing and variable costing. 
D)  Reported income under absorption costing is not affected by production level changes. 
E)  Under absorption costing, fixed manufacturing overhead is expensed as period expenses. 
A)  Under variable costing, direct materials and direct labor are expensed as period expenses. 
B)  Under variable costing, fixed manufacturing overhead is expensed as period expenses. 
C)  Fixed manufacturing overhead costs are treated the same under both absorption costing and variable costing. 
D)  Reported income under absorption costing is not affected by production level changes. 
E)  Under absorption costing, fixed manufacturing overhead is expensed as period expenses. B

Question 2

Which of the following best describes costs assigned to the product under the absorption costing method? Direct labor (DL)
Direct materials (DM)
Variable selling and administrative (VSA)
Variable manufacturing overhead (VOH)
Fixed selling and administrative (FSA)
Fixed manufacturing overhead (FOH)

Accepted Answer

A)  DL, DM, VSA, and VOH. 
B)  DL, DM, and VOH. 
C)  DL, DM, VOH, and FOH. 
D)  DL and DM. 
E)  DL, DM, FSA, and FOH. 
A)  DL, DM, VSA, and VOH. 
B)  DL, DM, and VOH. 
C)  DL, DM, VOH, and FOH. 
D)  DL and DM. 
E)  DL, DM, FSA, and FOH. C

Question 3

Triton Industries reports the following information regarding its production cost:
   a. Compute product cost per unit under variable costing.
b. Compute product cost per unit under absorption costing.

Accepted Answer

a. $27 DL + $12 DM + ($2,541,000/77,000) VOH = $72 per unit under variable costing
b. $72 + ($3,311,000/77,000) FOH = $115 per unit under absorption costing

Question 4

Magenta Inc. reports the following information for the current year, which is its first year of operations:   If the company's cost per unit of finished goods using absorption costing is $39.75, what is total variable overhead?

Accepted Answer

A)  $925,000 
B)  $877,500 
C)  $937,500 
D)  $865,800 
E)  $5,437,500 
A)  $925,000 
B)  $877,500 
C)  $937,500 
D)  $865,800 
E)  $5,437,500

Question 5

What are the benefits of using variable costing when striving to control costs? Are these benefits available under absorption costing?

Accepted Answer

Under absorption costing, both variable

Question 6

A company reports the following information for its first year of operations:   If the company's cost per unit of finished goods using variable costing is $2,375, what is total variable overhead?

Accepted Answer

A)  $237,500 
B)  $75,000 
C)  $312,500 
D)  $406,250 
E)  $97,500 
A)  $237,500 
B)  $75,000 
C)  $312,500 
D)  $406,250 
E)  $97,500

Question 7

Lukin Corporation reports the following first year production cost information:
   a. Compute production cost per unit under variable costing.
b. Compute production cost per unit under absorption costing.
c. Determine the net income using variable costing.
d. Determine the net income using absorption costing.

Accepted Answer

a. $41 DL + $15 DM + ($9,300,000/62,000)

Question 8

Under variable costing, the product unit cost consists of ________,direct materials, and variable overhead.

Accepted Answer

The answer of Under variable costing, the product unit cost...

Question 9

When the number of units produced exceeds the number of units sold, absorption costing defers some of the fixed costs incurred.

Accepted Answer

A) True 
 B)False

Question 10

Given the following data, total product cost per unit under variable costing is $10.75.

Accepted Answer

A) True 
 B)False

Question 11

Assuming fixed costs remain constant, and a company sells more units than it produces, then income under absorption costing is less than income under variable costing.

Accepted Answer

A) True 
 B)False

Question 12

A variable costing income statement focuses attention on the relationship between costs and sales that is not evident from the absorption costing format.

Accepted Answer

A) True 
 B)False

Question 13

Given the following data, calculate product cost per unit under absorption costing.

Accepted Answer

A)  $8 per unit 
B)  $8.50 per unit 
C)  $10.25 per unit 
D)  $10.75 per unit 
E)  $12 per unit 
A)  $8 per unit 
B)  $8.50 per unit 
C)  $10.25 per unit 
D)  $10.75 per unit 
E)  $12 per unit

Question 14

Milton Company reports the following information for the current year:   If the company's cost per unit of finished goods using absorption costing is $18, what is total fixed overhead?

Accepted Answer

A)  $225,000 
B)  $180,000 
C)  $270,000 
D)  $315,000 
E)  $720,000 
A)  $225,000 
B)  $180,000 
C)  $270,000 
D)  $315,000 
E)  $720,000

Question 15

Assuming fixed costs remain constant, and a company produces more units than it sells, then income under absorption costing is less than income under variable costing.

Accepted Answer

A) True 
 B)False

Question 16

The absorption costing approach assigns all manufacturing costs to products.

Accepted Answer

A) True 
 B)False

Question 17

Given Advanced Company's data, compute cost of finished goods in inventory under absorption costing.

Accepted Answer

A)  $285,000 
B)  $712,500 
C)  $427,500 
D)  $230,000 
E)  $345,000 
A)  $285,000 
B)  $712,500 
C)  $427,500 
D)  $230,000 
E)  $345,000

Question 18

State Industries has the following information for 20X1:
   There are no beginning inventories. Prepare an income statement for the year under absorption costing.

Accepted Answer

The answer of State Industries has the following information for...

Question 19

Jeter Corporation had net income of $212,000 based on variable costing. Beginning and ending inventories were 6,000 units and 10,000 units, respectively. Assume the fixed overhead per unit was $4 for both the beginning and ending inventory. What is net income under absorption costing?

Accepted Answer

A)  $252,000 
B)  $228,000 
C)  $244,000 
D)  $276,000 
E)  $212,000 
A)  $252,000 
B)  $228,000 
C)  $244,000 
D)  $276,000 
E)  $212,000

Question 20

What costs are treated as product costs under the absorption costing method?

Accepted Answer

Under absorption costing, dire

Which of the following statements is true?

Which of the following best describes costs assigned to the product under the absorption costing method? Direct labor (DL) Direct materials (DM) Variable selling and administrative (VSA) Variable manufacturing overhead (VOH) Fixed selling and administrative (FSA) Fixed manufacturing overhead (FOH)

Triton Industries reports the following information regarding its production cost: a. Compute product cost per unit under variable costing. b. Compute product cost per unit under absorption costing.

Magenta Inc. reports the following information for the current year, which is its first year of operations: If the company's cost per unit of finished goods using absorption costing is $39.75, what is total variable overhead?

What are the benefits of using variable costing when striving to control costs? Are these benefits available under absorption costing?

A company reports the following information for its first year of operations: If the company's cost per unit of finished goods using variable costing is $2,375, what is total variable overhead?

Under variable costing, the product unit cost consists of ________,direct materials, and variable overhead.

When the number of units produced exceeds the number of units sold, absorption costing defers some of the fixed costs incurred.

Given the following data, total product cost per unit under variable costing is $10.75.

Assuming fixed costs remain constant, and a company sells more units than it produces, then income under absorption costing is less than income under variable costing.

A variable costing income statement focuses attention on the relationship between costs and sales that is not evident from the absorption costing format.

Given the following data, calculate product cost per unit under absorption costing.

Milton Company reports the following information for the current year: If the company's cost per unit of finished goods using absorption costing is $18, what is total fixed overhead?

Assuming fixed costs remain constant, and a company produces more units than it sells, then income under absorption costing is less than income under variable costing.

The absorption costing approach assigns all manufacturing costs to products.

Given Advanced Company's data, compute cost of finished goods in inventory under absorption costing.

State Industries has the following information for 20X1: There are no beginning inventories. Prepare an income statement for the year under absorption costing.

Jeter Corporation had net income of $212,000 based on variable costing. Beginning and ending inventories were 6,000 units and 10,000 units, respectively. Assume the fixed overhead per unit was $4 for both the beginning and ending inventory. What is net income under absorption costing?

What costs are treated as product costs under the absorption costing method?

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity Based Costing and Analysis

Cost Behavior Cost-Volume-Profit Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Analyzing for Business Transactions

Partnership Accounting

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Exam 6: Variable Costing and Analysis

Which of the following statements is true?

Which of the following best describes costs assigned to the product under the absorption costing method? Direct labor (DL) Direct materials (DM) Variable selling and administrative (VSA) Variable manufacturing overhead (VOH) Fixed selling and administrative (FSA) Fixed manufacturing overhead (FOH)

Triton Industries reports the following information regarding its production cost: a. Compute product cost per unit under variable costing. b. Compute product cost per unit under absorption costing.

Magenta Inc. reports the following information for the current year, which is its first year of operations: If the company's cost per unit of finished goods using absorption costing is $39.75, what is total variable overhead?

What are the benefits of using variable costing when striving to control costs? Are these benefits available under absorption costing?

A company reports the following information for its first year of operations: If the company's cost per unit of finished goods using variable costing is $2,375, what is total variable overhead?

Under variable costing, the product unit cost consists of ________,direct materials, and variable overhead.

When the number of units produced exceeds the number of units sold, absorption costing defers some of the fixed costs incurred.

Given the following data, total product cost per unit under variable costing is $10.75.

Assuming fixed costs remain constant, and a company sells more units than it produces, then income under absorption costing is less than income under variable costing.

A variable costing income statement focuses attention on the relationship between costs and sales that is not evident from the absorption costing format.

Given the following data, calculate product cost per unit under absorption costing.

Milton Company reports the following information for the current year: If the company's cost per unit of finished goods using absorption costing is $18, what is total fixed overhead?

Assuming fixed costs remain constant, and a company produces more units than it sells, then income under absorption costing is less than income under variable costing.

The absorption costing approach assigns all manufacturing costs to products.

Given Advanced Company's data, compute cost of finished goods in inventory under absorption costing.

State Industries has the following information for 20X1: There are no beginning inventories. Prepare an income statement for the year under absorption costing.

Jeter Corporation had net income of $212,000 based on variable costing. Beginning and ending inventories were 6,000 units and 10,000 units, respectively. Assume the fixed overhead per unit was $4 for both the beginning and ending inventory. What is net income under absorption costing?

What costs are treated as product costs under the absorption costing method?

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity Based Costing and Analysis

Cost Behavior Cost-Volume-Profit Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Analyzing for Business Transactions

Partnership Accounting

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