Question 1

For a supervisor of a manufacturing department, which of the following costs is controllable?

Accepted Answer

A)  direct materials 
B)  insurance on factory building 
C)  depreciation of factory building 
D)  rent on factory building 
A)  direct materials 
B)  insurance on factory building 
C)  depreciation of factory building 
D)  rent on factory building

Question 2

For a period during which the quantity of inventory at the end was smaller than that at the beginning, income from operations reported under variable costing will be larger than income from operations reported under absorption costing.

Accepted Answer

A) True 
 B)False

Question 3

Management may use both absorption and variable costing methods for analyzing a particular product.

Accepted Answer

A) True 
 B)False

Question 4

In the absorption costing income statement, deduction of the cost of goods sold from sales yields contribution margin.

Accepted Answer

A) True 
 B)False

Question 5

For a period during which the quantity of product manufactured was less than the quantity sold, income from operations reported under absorption costing will be smaller than income from operations reported under variable costing.

Accepted Answer

A) True 
 B)False

Question 6

In contribution margin analysis, the unit price or unit cost factor is computed as:

Accepted Answer

A)  the difference between the actual unit price or unit cost and the planned unit price or cost, multiplied by the planned quantity sold 
B)  the difference between the actual unit price or unit cost and the planned unit price or cost, multiplied by the actual quantity sold 
C)  the difference between the actual quantity sold and the planned quantity sold, multiplied by the planned unit sales price or unit cost 
D)  the difference between the actual quantity sold and the planned quantity sold, multiplied by the actual unit sales price or unit cost 
A)  the difference between the actual unit price or unit cost and the planned unit price or cost, multiplied by the planned quantity sold 
B)  the difference between the actual unit price or unit cost and the planned unit price or cost, multiplied by the actual quantity sold 
C)  the difference between the actual quantity sold and the planned quantity sold, multiplied by the planned unit sales price or unit cost 
D)  the difference between the actual quantity sold and the planned quantity sold, multiplied by the actual unit sales price or unit cost

Question 7

A business operated at 100% of capacity during its first month, with the following results:   What is the amount of the income from operations that would be reported on the absorption costing income statement?

Accepted Answer

A)  $21,000 
B)  $18,900 
C)  $18,200 
D)  $27,900 
A)  $21,000 
B)  $18,900 
C)  $18,200 
D)  $27,900

Question 8

Variable costs are $80 per unit, and fixed costs are $40,000. Sales are estimated to be 4,000 units. (a) How much would absorption costing income from operations differ between a plan to produce 4,000 units and a plan to produce 5,000 units? (b) How much would variable costing income from operations differ between the two production plans?

Accepted Answer

The answer of Variable costs are $80 per unit, and...

Question 9

In the short run, the selling price of a product should normally not be less than the variable costs and expenses of making and selling it.

Accepted Answer

A) True 
 B)False

Question 10

Under absorption costing, which of the following costs would not be included in finished goods inventory?

Accepted Answer

A)  direct labor cost 
B)  direct materials cost 
C)  variable and fixed factory overhead cost 
D)  variable and fixed selling and administrative expenses 
A)  direct labor cost 
B)  direct materials cost 
C)  variable and fixed factory overhead cost 
D)  variable and fixed selling and administrative expenses

Question 11

Which of the following would be included in the cost of a product manufactured according to absorption costing?

Accepted Answer

A)  advertising expense 
B)  sales salaries 
C)  depreciation expense on factory building 
D)  office supplies costs 
A)  advertising expense 
B)  sales salaries 
C)  depreciation expense on factory building 
D)  office supplies costs

Question 12

If the ability to sell and the amount of production facilities devoted to each of two products is equal, it is profitable to increase the sales of that product with the lowest contribution margin.

Accepted Answer

A) True 
 B)False

Question 13

In contribution margin analysis, the effect of a difference in unit sales price or unit cost on the number of units sold is termed the unit price or unit cost factor.

Accepted Answer

A) True 
 B)False

Question 14

Philadelphia Company has the following information for March:

Accepted Answer

: Determine the March (a) manufacturing

Question 15

A business operated at 100% of capacity during its first month and incurred the following costs:   If 2,000 units remain unsold at the end of the month and sales total $300,000 for the month, what would be the amount of income from operations reported on the variable costing income statement?

Accepted Answer

A)  $100,800 
B)  $100,000 
C)  $114,800 
D)  $140,000 
A)  $100,800 
B)  $100,000 
C)  $114,800 
D)  $140,000

Question 16

Cades Company has the following information for March:

Accepted Answer

Determine the March (a) manufacturing ma

Question 17

In evaluating the performance of salespersons, the salesperson with the highest level of sales should be evaluated as the best performer.

Accepted Answer

A) True 
 B)False

Question 18

For a period during which the quantity of product manufactured was less than the quantity sold, income from operations reported under absorption costing will be larger than income from operations reported under variable costing.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is(are) reason(s) for easy identification and control of variable manufacturing costs under the variable costing method?

Accepted Answer

A)  variable and fixed costs are reported separately. 
B)  variable costs can be controlled by the operating management. 
C)  fixed costs, such as property insurance, are normally the responsibility of higher management not the operating management. 
D)  All of the above are true. 
A)  variable and fixed costs are reported separately. 
B)  variable costs can be controlled by the operating management. 
C)  fixed costs, such as property insurance, are normally the responsibility of higher management not the operating management. 
D)  All of the above are true.

Question 20

For a period during which the quantity of product manufactured equals the quantity sold, income from operations reported under absorption costing will equal the income from operations reported under variable costing.

Accepted Answer

A) True 
 B)False

For a supervisor of a manufacturing department, which of the following costs is controllable?

For a period during which the quantity of inventory at the end was smaller than that at the beginning, income from operations reported under variable costing will be larger than income from operations reported under absorption costing.

Management may use both absorption and variable costing methods for analyzing a particular product.

In the absorption costing income statement, deduction of the cost of goods sold from sales yields contribution margin.

For a period during which the quantity of product manufactured was less than the quantity sold, income from operations reported under absorption costing will be smaller than income from operations reported under variable costing.

In contribution margin analysis, the unit price or unit cost factor is computed as:

A business operated at 100% of capacity during its first month, with the following results: What is the amount of the income from operations that would be reported on the absorption costing income statement?

In the short run, the selling price of a product should normally not be less than the variable costs and expenses of making and selling it.

Under absorption costing, which of the following costs would not be included in finished goods inventory?

Which of the following would be included in the cost of a product manufactured according to absorption costing?

If the ability to sell and the amount of production facilities devoted to each of two products is equal, it is profitable to increase the sales of that product with the lowest contribution margin.

In contribution margin analysis, the effect of a difference in unit sales price or unit cost on the number of units sold is termed the unit price or unit cost factor.

Philadelphia Company has the following information for March:

A business operated at 100% of capacity during its first month and incurred the following costs: If 2,000 units remain unsold at the end of the month and sales total $300,000 for the month, what would be the amount of income from operations reported on the variable costing income statement?

Cades Company has the following information for March:

In evaluating the performance of salespersons, the salesperson with the highest level of sales should be evaluated as the best performer.

For a period during which the quantity of product manufactured was less than the quantity sold, income from operations reported under absorption costing will be larger than income from operations reported under variable costing.

Which of the following is(are) reason(s) for easy identification and control of variable manufacturing costs under the variable costing method?

For a period during which the quantity of product manufactured equals the quantity sold, income from operations reported under absorption costing will equal the income from operations reported under variable costing.

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

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Exam 5: Variable Costing for Management Analysis

For a supervisor of a manufacturing department, which of the following costs is controllable?

For a period during which the quantity of inventory at the end was smaller than that at the beginning, income from operations reported under variable costing will be larger than income from operations reported under absorption costing.

Management may use both absorption and variable costing methods for analyzing a particular product.

In the absorption costing income statement, deduction of the cost of goods sold from sales yields contribution margin.

For a period during which the quantity of product manufactured was less than the quantity sold, income from operations reported under absorption costing will be smaller than income from operations reported under variable costing.

In contribution margin analysis, the unit price or unit cost factor is computed as:

A business operated at 100% of capacity during its first month, with the following results: What is the amount of the income from operations that would be reported on the absorption costing income statement?

In the short run, the selling price of a product should normally not be less than the variable costs and expenses of making and selling it.

Under absorption costing, which of the following costs would not be included in finished goods inventory?

Which of the following would be included in the cost of a product manufactured according to absorption costing?

If the ability to sell and the amount of production facilities devoted to each of two products is equal, it is profitable to increase the sales of that product with the lowest contribution margin.

In contribution margin analysis, the effect of a difference in unit sales price or unit cost on the number of units sold is termed the unit price or unit cost factor.

Philadelphia Company has the following information for March:

A business operated at 100% of capacity during its first month and incurred the following costs: If 2,000 units remain unsold at the end of the month and sales total $300,000 for the month, what would be the amount of income from operations reported on the variable costing income statement?

Cades Company has the following information for March:

In evaluating the performance of salespersons, the salesperson with the highest level of sales should be evaluated as the best performer.

For a period during which the quantity of product manufactured was less than the quantity sold, income from operations reported under absorption costing will be larger than income from operations reported under variable costing.

Which of the following is(are) reason(s) for easy identification and control of variable manufacturing costs under the variable costing method?

For a period during which the quantity of product manufactured equals the quantity sold, income from operations reported under absorption costing will equal the income from operations reported under variable costing.

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Filters