Question 1

The underlying principle that absorption costing satisfies is the historical cost principle.

Accepted Answer

A) True 
 B)False

Question 2

In absorption costing,all manufacturing costs are considered to be

Accepted Answer

A) product costs. 
B) period costs. 
C) variable costs. 
D) mixed costs. 
A) product costs. 
B) period costs. 
C) variable costs. 
D) mixed costs.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

Sales $171,000 Less cost of goods sold:

Question 5

Based on the matching principle,all product cost flow through

Accepted Answer

A) Raw Material Inventory,Work in Process Inventory and Finished Goods until the goods are sold. 
B) Raw Material Inventory,Work in Process Inventory and Manufacturing Overhead until the goods are sold. 
C) Raw Material Inventory,Direct Materials and Conversion,and Work in Process. 
D) Raw Material Inventory,Conversion,and Finished Goods until the goods are sold. 
A) Raw Material Inventory,Work in Process Inventory and Finished Goods until the goods are sold. 
B) Raw Material Inventory,Work in Process Inventory and Manufacturing Overhead until the goods are sold. 
C) Raw Material Inventory,Direct Materials and Conversion,and Work in Process. 
D) Raw Material Inventory,Conversion,and Finished Goods until the goods are sold.

Question 6

Variable costing is acceptable for which of the following purposes?

Accepted Answer

A) GAAP reporting 
B) Internal reporting 
C) Reporting to the IRS 
D) SEC reporting 
A) GAAP reporting 
B) Internal reporting 
C) Reporting to the IRS 
D) SEC reporting

Question 7

Absorption costing is used for managerial accounting,but is not allowed for reporting in accordance with generally accepted accounting principles.

Accepted Answer

A) True 
 B)False

Question 8

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 9

What managerial behavior does variable costing render ineffective?

Accepted Answer

Variable costing prevents managers from

Question 10

When the

Accepted Answer

A) ending inventory on the balance sheet is lower under absorption costing than under variable costing. 
B) ending inventory on the balance sheet is higher under absorption costing than under variable costing. 
C) ending inventory on the balance sheet is the same under absorption costing and variable costing. 
D) cannot be determined with the information given. 
A) ending inventory on the balance sheet is lower under absorption costing than under variable costing. 
B) ending inventory on the balance sheet is higher under absorption costing than under variable costing. 
C) ending inventory on the balance sheet is the same under absorption costing and variable costing. 
D) cannot be determined with the information given.

Question 11

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.

The underlying principle that absorption costing satisfies is the historical cost principle.

In absorption costing,all manufacturing costs are considered to be

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

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

Based on the matching principle,all product cost flow through

Variable costing is acceptable for which of the following purposes?

Absorption costing is used for managerial accounting,but is not allowed for reporting in accordance with generally accepted accounting principles.

When the

What managerial behavior does variable costing render ineffective?

When the

When the

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

The underlying principle that absorption costing satisfies is the historical cost principle.

In absorption costing,all manufacturing costs are considered to be

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

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

Based on the matching principle,all product cost flow through

Variable costing is acceptable for which of the following purposes?

Absorption costing is used for managerial accounting,but is not allowed for reporting in accordance with generally accepted accounting principles.

When the

What managerial behavior does variable costing render ineffective?

When the

When the

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