Question 1

The absorption costing approach assigns all manufacturing costs to products.

Accepted Answer

A) True 
 B)False

Question 2

Fixed costs change in the short run depending upon management's decision to accept or reject special orders.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A)  $4.75 per unit 
B)  $7.05 per unit 
C)  $15.38 per unit 
D)  $13.08 per unit 
E)  $16 per unit 
A)  $4.75 per unit 
B)  $7.05 per unit 
C)  $15.38 per unit 
D)  $13.08 per unit 
E)  $16 per unit

Question 4

To convert variable costing net income to absorption costing net income, ________ the fixed production cost in ending inventory and ________ the fixed production cost in beginning inventory.

Accepted Answer

The answer of To convert variable costing net income to...

Question 5

Which of the following statements is true regarding variable costing?

Accepted Answer

A)  It is a traditional costing approach. 
B)  Only manufacturing costs that change in total with changes in production level are included in product costs. 
C)  It is not permitted to be used for managerial reporting. 
D)  It treats overhead in the same manner as absorption costing. 
E)  It makes it easier to manipulate earnings with changes in production levels. 
A)  It is a traditional costing approach. 
B)  Only manufacturing costs that change in total with changes in production level are included in product costs. 
C)  It is not permitted to be used for managerial reporting. 
D)  It treats overhead in the same manner as absorption costing. 
E)  It makes it easier to manipulate earnings with changes in production levels.

Question 6

Urban Company reports the following information regarding its production cost:   Compute production cost per unit under variable costing.

Accepted Answer

A)  $18.00 
B)  $36.50 
C)  $42.00 
D)  $13.00 
E)  $31.00 
A)  $18.00 
B)  $36.50 
C)  $42.00 
D)  $13.00 
E)  $31.00

Question 7

Aces, Inc., a manufacturer of tennis rackets, began operations this year. The company produced 6,000 rackets and sold 4,900. At year-end, the company reported the following income statement using absorption costing.   Production costs per tennis racket total $38, which consists of $25 in variable production costs and $13 in fixed production costs (based on the 6,000 units produced). Ten percent of total selling and administrative expenses are variable. Compute net income under variable costing.

Accepted Answer

A)  $194,100 
B)  $165,500 
C)  $311,000 
D)  $240,500 
E)  $233,000 
A)  $194,100 
B)  $165,500 
C)  $311,000 
D)  $240,500 
E)  $233,000

Question 8

Tim's Tools, a manufacturer of cordless drills, began operations this year. During this year, the company produced 20,000 units and sold 18,000 units. At year-end, the company reported the following income statement using absorption costing:   Production costs per unit total $14, which consists of $12.90 in variable production costs and $1.10 in fixed production costs (based on the 20,000 units produced). 60% of total selling and administrative expenses are variable. Compute net income under variable costing.

Accepted Answer

A)  $307,800 
B)  $198,000 
C)  $195,800 
D)  $288,000 
E)  $220,000 
A)  $307,800 
B)  $198,000 
C)  $195,800 
D)  $288,000 
E)  $220,000

Question 9

Triton Industries reports the following information regarding its production cost:
 $$\begin{array} { | l | l | } 
\hline \text { Units produced } & 77,000 \text { units } \
\hline \text { Direct labor } & \$ 27 \text { per unit } \
\hline \text { Direct materials } & \$ 12 \text { per unit } \
\hline \text { Variable overhead } & \$ 33 \text { per unit } \
\hline \text { Fixed overhead } & \$ 3,311,000 \text { in total } \
\hline
\end{array}$$ 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 + $33 VOH =

Question 10

[The following information applies to the questions displayed below.]
Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year.
  
-Given Advanced Company's data, compute cost of finished goods in inventory under variable 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 11

Variable costing separates variable costs from fixed costs and therefore makes it easier to identify and assign control over costs.

Accepted Answer

A) True 
 B)False

Question 12

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 $2.02, what is the amount of total fixed overhead?

Accepted Answer

A)  $26,660 
B)  $35,690 
C)  $24,510 
D)  $60,200 
E)  Cannot be determined from the given data. 
A)  $26,660 
B)  $35,690 
C)  $24,510 
D)  $60,200 
E)  Cannot be determined from the given data.

Question 13

Which of the following is not a product cost under variable costing?

Accepted Answer

A)  Direct materials. 
B)  Fixed manufacturing overhead. 
C)  Direct labor. 
D)  Variable manufacturing overhead. 
E)  All variable manufacturing costs. 
A)  Direct materials. 
B)  Fixed manufacturing overhead. 
C)  Direct labor. 
D)  Variable manufacturing overhead. 
E)  All variable manufacturing costs.

Question 14

Variable costing is the only acceptable basis for both external reporting and tax reporting.

Accepted Answer

A) True 
 B)False

Question 15

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

@#IMG-DLM&
Feedback: Cost of goods sold = {Total v

Question 16

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 17

Clear Company reports the following information for its first year of operations:   If the company's cost per unit of finished goods using absorption costing is $19.30, what is total fixed overhead?

Accepted Answer

A)  $350,000 
B)  $255,000 
C)  $150,000 
D)  $249,900 
E)  $147,000 
A)  $350,000 
B)  $255,000 
C)  $150,000 
D)  $249,900 
E)  $147,000

Question 18

Income ________ when there is zero beginning inventory and all inventory units produced are sold.

Accepted Answer

A)  Will be lower under variable costing than absorption costing 
B)  Will be the same under both variable and absorption costing 
C)  Will be higher under variable costing than absorption costing 
D)  Will be higher than gross margin under variable costing 
E)  Will be lower than administrative costs under absorption costing 
A)  Will be lower under variable costing than absorption costing 
B)  Will be the same under both variable and absorption costing 
C)  Will be higher under variable costing than absorption costing 
D)  Will be higher than gross margin under variable costing 
E)  Will be lower than administrative costs under absorption costing

Question 19

Income under absorption costing will always be different than income under variable costing.

Accepted Answer

A) True 
 B)False

Question 20

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.

The absorption costing approach assigns all manufacturing costs to products.

Fixed costs change in the short run depending upon management's decision to accept or reject special orders.

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

To convert variable costing net income to absorption costing net income, the fixed production cost in ending inventory and the fixed production cost in beginning inventory.

Which of the following statements is true regarding variable costing?

Urban Company reports the following information regarding its production cost: Compute production cost per unit under variable costing.

[The following information applies to the questions displayed below.] Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year. -Given Advanced Company's data, compute cost of finished goods in inventory under variable costing.

Variable costing separates variable costs from fixed costs and therefore makes it easier to identify and assign control over costs.

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 $2.02, what is the amount of total fixed overhead?

Which of the following is not a product cost under variable costing?

Variable costing is the only acceptable basis for both external reporting and tax reporting.

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

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

Clear Company reports the following information for its first year of operations: If the company's cost per unit of finished goods using absorption costing is $19.30, what is total fixed overhead?

Income ________ when there is zero beginning inventory and all inventory units produced are sold.

Income under absorption costing will always be different than income under variable costing.

Which of the following statements is true?

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and 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

Lean Principles and Accounting

Accounting for Business Transactions

Filters

Exam 6: Variable Costing and Analysis

The absorption costing approach assigns all manufacturing costs to products.

Fixed costs change in the short run depending upon management's decision to accept or reject special orders.

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

To convert variable costing net income to absorption costing net income, ________ the fixed production cost in ending inventory and ________ the fixed production cost in beginning inventory.

Which of the following statements is true regarding variable costing?

Urban Company reports the following information regarding its production cost: Compute production cost per unit under variable costing.

[The following information applies to the questions displayed below.] Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year. -Given Advanced Company's data, compute cost of finished goods in inventory under variable costing.

Variable costing separates variable costs from fixed costs and therefore makes it easier to identify and assign control over costs.

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 $2.02, what is the amount of total fixed overhead?

Which of the following is not a product cost under variable costing?

Variable costing is the only acceptable basis for both external reporting and tax reporting.

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

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

Clear Company reports the following information for its first year of operations: If the company's cost per unit of finished goods using absorption costing is $19.30, what is total fixed overhead?

Income ________ when there is zero beginning inventory and all inventory units produced are sold.

Income under absorption costing will always be different than income under variable costing.

Which of the following statements is true?

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and 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

Lean Principles and Accounting

Accounting for Business Transactions

Filters

To convert variable costing net income to absorption costing net income, the fixed production cost in ending inventory and the fixed production cost in beginning inventory.