Question 1

Describe the format for a variable costing income statement.

Accepted Answer

A variable costing income statement begi

Question 2

When using variable costing,fixed manufacturing overhead is treated as which of the following types of costs?

Accepted Answer

A) Product 
B) Mixed 
C) Period 
D) Variable 
A) Product 
B) Mixed 
C) Period 
D) Variable

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Based on the matching principle,all product costs end up in

Accepted Answer

A) Raw materials Inventory. 
B) Work in Process. 
C) Finished Goods. 
D) Cost of Goods Sold. 
A) Raw materials Inventory. 
B) Work in Process. 
C) Finished Goods. 
D) Cost of Goods Sold.

Question 5

Monroe Corporation produced 20,000
a.Under the absorption costing method,what is the average unit product cost?
b.Under the variable costing method,what is the average unit product cost?

Accepted Answer

a.$600,000/20,000 =

Question 6

Walker Manufacturing began its operations on January 1 of the current year.Walker produced 10,000

Accepted Answer

A) $8,000 
B) $28,000 
C) $30,000 
D) $30,400 
A) $8,000 
B) $28,000 
C) $30,000 
D) $30,400

Question 7

Which of the following is not a product cost?

Accepted Answer

A) Direct material 
B) Direct labor 
C) Selling expenses 
D) Manufacturing overhead 
A) Direct material 
B) Direct labor 
C) Selling expenses 
D) Manufacturing overhead

Question 8

Walker Manufacturing began its operations on January 1 of the current year.Walker produced 10,000

Accepted Answer

A) $26,000 
B) $6,000 
C) $8,400 
D) $10,000 
A) $26,000 
B) $6,000 
C) $8,400 
D) $10,000

Question 9

Etters Manufacturing Company has provided the following financial data for its most recent month.
   Required:
Prepare an income statement using a variable costing format.

Accepted Answer

Sales $171,000 Less variable cost of goo

Question 10

Walker Manufacturing began its operations on January 1 of the current year.Walker produced 10,000

Accepted Answer

A) $26,000 
B) $6,000 
C) $8,400 
D) $10,000 
A) $26,000 
B) $6,000 
C) $8,400 
D) $10,000

Question 11

When production volume exceeds sales volume,net income will be higher when using absorption costing than when using variable costing.

Accepted Answer

A) True 
 B)False

Question 12

When using variable costing,period costs consist of

Accepted Answer

A) selling and administrative costs. 
B) administrative costs and fixed manufacturing overhead 
C) fixed and variable manufacturing overhead. 
D) selling and administrative costs as well as fixed manufacturing overhead. 
A) selling and administrative costs. 
B) administrative costs and fixed manufacturing overhead 
C) fixed and variable manufacturing overhead. 
D) selling and administrative costs as well as fixed manufacturing overhead.

Question 13

The cost accumulation method required by generally accepted accounting principles is referred to as

Accepted Answer

A) full costing. 
B) absorption costing. 
C) either full or absorption or absorption costing is acceptable according to generally accepted accounting principle. 
D) neither full nor absorption costing is allowed by generally accepted accounting principles. 
A) full costing. 
B) absorption costing. 
C) either full or absorption or absorption costing is acceptable according to generally accepted accounting principle. 
D) neither full nor absorption costing is allowed by generally accepted accounting principles.

Question 14

In variable costing,fixed manufacturing overhead is treated as a product cost.

Accepted Answer

A) True 
 B)False

Question 15

The difference between absorption and variable costing is the timing difference in the expensing of fixed overhead costs.

Accepted Answer

A) True 
 B)False

Question 16

The matching principle states that

Accepted Answer

A) expenses should be matched with specific jobs. 
B) expenses should be matched with revenues they generate. 
C) revenues should be recorded in the period in which the payment is received. 
D) expenses should be matched to assets which generated the expenses. 
A) expenses should be matched with specific jobs. 
B) expenses should be matched with revenues they generate. 
C) revenues should be recorded in the period in which the payment is received. 
D) expenses should be matched to assets which generated the expenses.

Question 17

When the

Accepted Answer

A) operating income is higher under absorption costing than under variable costing. 
B) operating income is lower under absorption costing than under variable costing. 
C) operating is the same under absorption costing and variable costing. 
D) cannot be determined with the information given. 
A) operating income is higher under absorption costing than under variable costing. 
B) operating income is lower under absorption costing than under variable costing. 
C) operating is the same under absorption costing and variable costing. 
D) cannot be determined with the information given.

Question 18

Mixed costs must be divided into which of the following components?

Accepted Answer

A) Period and product 
B) Fixed and variable 
C) Direct and indirect 
D) Cost and profit 
A) Period and product 
B) Fixed and variable 
C) Direct and indirect 
D) Cost and profit

Question 19

For each item below,identify whether the item applies to an absorption costing or variable costing income statement by marking an "X" in the appropriate column.

Accepted Answer

The answer of For each item below,identify whether the item...

Question 20

Absorption costing is also referred to as

Accepted Answer

A) variable costing. 
B) full costing. 
C) nominal costing. 
D) period costing. 
A) variable costing. 
B) full costing. 
C) nominal costing. 
D) period costing.

Describe the format for a variable costing income statement.

When using variable costing,fixed manufacturing overhead is treated as which of the following types of costs?

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

Based on the matching principle,all product costs end up in

Monroe Corporation produced 20,000 a.Under the absorption costing method,what is the average unit product cost? b.Under the variable costing method,what is the average unit product cost?

Walker Manufacturing began its operations on January 1 of the current year.Walker produced 10,000

Which of the following is not a product cost?

Walker Manufacturing began its operations on January 1 of the current year.Walker produced 10,000

Etters Manufacturing Company has provided the following financial data for its most recent month. Required: Prepare an income statement using a variable costing format.

Walker Manufacturing began its operations on January 1 of the current year.Walker produced 10,000

When production volume exceeds sales volume,net income will be higher when using absorption costing than when using variable costing.

When using variable costing,period costs consist of

The cost accumulation method required by generally accepted accounting principles is referred to as

In variable costing,fixed manufacturing overhead is treated as a product cost.

The difference between absorption and variable costing is the timing difference in the expensing of fixed overhead costs.

The matching principle states that

When the

Mixed costs must be divided into which of the following components?

For each item below,identify whether the item applies to an absorption costing or variable costing income statement by marking an "X" in the appropriate column.

Absorption costing is also referred to as

Accounting As a Tool for Management

Cost Behavior and Cost Estimation

Cost-Volume-Profit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting

Performance Evaluation: Variance Analysis

Activity-Based Costing and Activity Based Management

Using Accounting Information to Make Managerial Decisions

Capital Budgeting

Decentralizing and Performance Evaluation

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

Statement of Cash Flows

Topic Focus: Process Costing

Topic Focus Standard Costing Systems

Topic Focus Customer Profitability

Filters

Exam 15: Topic Focus Variable and Absorption Costing

Describe the format for a variable costing income statement.

When using variable costing,fixed manufacturing overhead is treated as which of the following types of costs?

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

Based on the matching principle,all product costs end up in

Monroe Corporation produced 20,000 a.Under the absorption costing method,what is the average unit product cost? b.Under the variable costing method,what is the average unit product cost?

Walker Manufacturing began its operations on January 1 of the current year.Walker produced 10,000

Which of the following is not a product cost?

Walker Manufacturing began its operations on January 1 of the current year.Walker produced 10,000

Etters Manufacturing Company has provided the following financial data for its most recent month. Required: Prepare an income statement using a variable costing format.

Walker Manufacturing began its operations on January 1 of the current year.Walker produced 10,000

When production volume exceeds sales volume,net income will be higher when using absorption costing than when using variable costing.

When using variable costing,period costs consist of

The cost accumulation method required by generally accepted accounting principles is referred to as

In variable costing,fixed manufacturing overhead is treated as a product cost.

The difference between absorption and variable costing is the timing difference in the expensing of fixed overhead costs.

The matching principle states that

When the

Mixed costs must be divided into which of the following components?

For each item below,identify whether the item applies to an absorption costing or variable costing income statement by marking an "X" in the appropriate column.

Absorption costing is also referred to as

Accounting As a Tool for Management

Cost Behavior and Cost Estimation

Cost-Volume-Profit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting

Performance Evaluation: Variance Analysis

Activity-Based Costing and Activity Based Management

Using Accounting Information to Make Managerial Decisions

Capital Budgeting

Decentralizing and Performance Evaluation

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

Statement of Cash Flows

Topic Focus: Process Costing

Topic Focus Standard Costing Systems

Topic Focus Customer Profitability

Filters