Question 1

Under absorption costing and variable costing, how are variable manufacturing costs treated? $$\begin{array} { l l l } 
& \text { Absorption } & \text { Variable } \
\text { a. } & \text { Product Cost } & \text { Product Cost } \
\text { b. } & \text { Product Cost } & \text { Period Cost } \
\text { c. } & \text { Period Cost } & \text { Product Cost } \
\text { d. } & \text { Period Cost } & \text { Period Cost }
\end{array}$$

Accepted Answer

The answer of Under absorption costing and variable costing, how...

Question 2

Under absorption costing and variable costing, how are direct labor costs treated? $$\begin{array} { l l l } 
& \text { Absorption } & \text { Variable } \
\text { a. } & \text { Product Cost } & \text { Product Cost } \
\text { b. } & \text { Product Cost } & \text { Period Cost } \
\text { c. } & \text { Period Cost } & \text { Product Cost } \
\text { d. } & \text { Period Cost } & \text { Period Cost }
\end{array}$$

Accepted Answer

The answer of Under absorption costing and variable costing, how...

Question 3

Fixed selling expenses are period costs

Accepted Answer

A) under both absorption and variable costing. 
B) under neither absorption nor variable costing. 
C) under absorption costing, but not under variable costing. 
D) under variable costing, but not under absorption costing.

Question 4

Ramirez Corporation sells two types of computer hard drives.The sales mix is 30% (Q-Drive) and 70% (Q-Drive Plus).Q-Drive has variable costs per unit of $90 and a selling price of $150.Q-Drive Plus has variable costs per unit of $105 and a selling price of $195.The weighted-average unit contribution margin for Ramirez is

Accepted Answer

A) $69. 
B) $75. 
C) $81. 
D) $150.

Question 5

For Franklin, Inc., sales is $2,000,000, fixed expenses are $600,000, and the contribution margin ratio is 36%.What is net income?

Accepted Answer

A) $120,000 
B) $216,000 
C) $504,000 
D) $720,000

Question 6

Use the following information for questions 
MacCloud Industries has two divisions-Standard and Premium. Each division has hundreds of different types of tennis racquets and tennis products. The following information is available: $\begin{array}{lrr}&\text { Standard Division }&\text { Premium Division }&\text { Total }\
\text { Sales } & \$ 400,000 & \$ 600,000 &\$1,000,000\
\text { Variable costs } & 280,000 & 360,000\
\text { Contribution margin }&\$120,000&\$240,000\\text { Total fixed costs }&&&\$300,000
\end{array}$
-What is the weighted-average contribution margin ratio?

Accepted Answer

A) 34% 
B) 35% 
C) 36% 
D) 50%

Question 7

Greg's Breads can produce and sell only one of the following two products: $\begin{array}{lll}&\text { Oven } & \text { Contribution } \
&\text { Hours Required } & \text { Margin Per Unit }\
\text { Muffins } & 0.2 & \$ 3 \
\text { Coffee Cakes } & 0.3 & \$ 4
\end{array}$ The company has oven capacity of 1,500 hours.How much will contribution margin be if it produces only the most profitable product?

Accepted Answer

A) $15,000 
B) $20,000 
C) $22,500 
D) $30,000

Question 8

For the three years 2015-2017,

Accepted Answer

A) absorption costing income exceeds variable costing income by $8,000. 
B) absorption costing income equals variable costing income. 
C) variable costing income exceeds absorption costing income by $8,000. 
D) absorption costing income may be greater than, equal to, or less than variable costing income, depending on the situation.

Question 9

When units sold exceed units produced, income under absorption costing is higher than income under variable costing.

Accepted Answer

A) True 
 B)False

Question 10

Woolford's CVP income statement included sales of 5,000 units, a selling price of $50, variable expenses of $30 per unit, and net income of $25,000.Fixed expenses are

Accepted Answer

A) $75,000. 
B) $100,000. 
C) $150,000. 
D) $250,000.

Question 11

What is the key factor in determining sales mix if a company has limited resources?

Accepted Answer

A) Contribution margin per unit of limited resource 
B) The amount of fixed costs per unit 
C) Total contribution margin 
D) The cost of limited resources

Question 12

For Franklin, Inc., sales is $2,000,000, fixed expenses are $600,000, and the contribution margin ratio is 36%.What are the total variable expenses?

Accepted Answer

A) $384,000 
B) $720,000 
C) $1,280,000 
D) $2,000,000

Question 13

Some fixed manufacturing overhead costs of the current period are deferred to future periods under

Accepted Answer

A) absorption costing. 
B) variable costing. 
C) both absorption and variable costing. 
D) neither absorption nor variable costing.

Question 14

Use the following information for questions 
Swanson Company has two divisions; Sporting Goods and Sports Gear. The sales mix is 65% for Sporting Goods and 35% for Sports Gear. Swanson incurs $6,660,000 in fixed costs. The contribution margin ratio for Sporting Goods is 30%, while for Sports Gear it is 50%.
-What will be the total contribution margin at the break-even point?

Accepted Answer

A) $5,730,699 
B) $6,660,000 
C) $6,720,000 
D) $7,740,000

Question 15

Net income under variable costing is contribution margin less

Accepted Answer

A) cost of goods sold. 
B) fixed manufacturing overhead and fixed selling and administrative expenses. 
C) fixed manufacturing overhead and variable manufacturing overhead. 
D) variable selling and administrative expenses and fixed selling and administrative expenses.

Question 16

Under absorption costing and variable costing, how are fixed manufacturing costs treated? $$\begin{array} { l l l } 
& \text { Absorption } & \text { Variable } \
\text { a. } & \text { Product Cost } & \text { Product Cost } \
\text { b. } & \text { Product Cost } & \text { Period Cost } \
\text { c. } & \text { Period Cost } & \text { Product Cost } \
\text { d. } & \text { Period Cost } & \text { Period Cost }
\end{array}$$

Accepted Answer

The answer of Under absorption costing and variable costing, how...

Question 17

The weighted-average contribution margin of all the products is computed when determining the break-even sales for a multi-product firm.

Accepted Answer

A) True 
 B)False

Question 18

For Buffalo Co., at a sales level of 4,000 units, sales is $75,000, variable expenses total $50,000, and fixed expenses are $21,000.What is the contribution margin per unit?

Accepted Answer

A) $5.25 
B) $6.25 
C) $12.50 
D) $18.75

Question 19

Hinge Manufacturing's cost of goods sold is $420,000 variable and $240,000 fixed.The company's selling and administrative expenses are $300,000 variable and $360,000 fixed.If the company's sales is $1,580,000, what is its net income?

Accepted Answer

A) $260,000 
B) $860,000 
C) $920,000 
D) $980,000

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 6: Reporting and Analyzing Inventory

Fixed selling expenses are period costs

For Franklin, Inc., sales is $2,000,000, fixed expenses are $600,000, and the contribution margin ratio is 36%.What is net income?

For the three years 2015-2017,

When units sold exceed units produced, income under absorption costing is higher than income under variable costing.

Woolford's CVP income statement included sales of 5,000 units, a selling price of $50, variable expenses of $30 per unit, and net income of $25,000.Fixed expenses are

What is the key factor in determining sales mix if a company has limited resources?

For Franklin, Inc., sales is $2,000,000, fixed expenses are $600,000, and the contribution margin ratio is 36%.What are the total variable expenses?

Some fixed manufacturing overhead costs of the current period are deferred to future periods under

Net income under variable costing is contribution margin less

The weighted-average contribution margin of all the products is computed when determining the break-even sales for a multi-product firm.

For Buffalo Co., at a sales level of 4,000 units, sales is $75,000, variable expenses total $50,000, and fixed expenses are $21,000.What is the contribution margin per unit?

Hinge Manufacturing's cost of goods sold is $420,000 variable and $240,000 fixed.The company's selling and administrative expenses are $300,000 variable and $360,000 fixed.If the company's sales is $1,580,000, what is its net income?

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