Exam 6: Variable Costing and Analysis

Assuming fixed costs remain constant, and a company produces and sells the same number of units, then income under absorption costing is less than income under variable costing.

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Match the following.

Cost a manager can determine or greatly affect the amount.

Manufacturing margin

Sales less variable production costs.

Break-even in units

Sales less cost of goods sold.

Period costs

Correct Answer:

Verified

Cost a manager can determine or greatly affect the amount.

Sales less variable production costs.

Sales less cost of goods sold.

Direct labor, direct materials, and manufacturing overhead.

Sales less variable expenses.

Fixed costs divided by contribution margin per unit.

A costing method that includes all manufacturing costs.

A costing method that includes only variable manufacturing costs.

Costs that are expensed in the period they are incurred.

An income statement format that focuses on cost behavior.

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