Which of the following is true? • Depreciation cost is always product cost • Depreciation cost is always period cost • Selling expense if always part of period cost, regardless of product costing system • Income under absorption is always greater than variable costing because of deferment of FOH

Which of the following is true? • Depreciation cost is always product cost • Depreciation cost is always period cost • Selling expense if always part of period cost, regardless of product costing system • Income under absorption is always greater than variable costing because of deferment of FOH

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 7Q: Why are there objections to using absorption costing when segment reports of profitability are being...

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Similar questions

A general rule in relevant cost analysis is: O A. variable costs are always relevant. O B. fixed costs are always irrelevant. O C. Incremental future costs and revenues are always relevant. O D. depreciation is always irrelevant.
Which one of these is an example of a variable cost? a. Raw material expenses b. Depreciation costs c. None of the choices d. Rent
Why are there objections to using absorption costing when segment reports of profitability are being prepared?
Which type of cost has an unchanging total expense and a decreasing average expense as output increases?
Variable costs are costs that vary, in total, in direct proportion to changes in volume or level of activity. A True B False
Advocates of variable costing argue that * a. fixed production costs should be added to inventory because such costs have future service potential and therefore are inventoriable as an asset. b. fixed production costs should be capitalized as an asset and amortized over future periods when benefits from such costs are expected to be received. c. fixed production costs should be charged to the period in which they are incurred unless sales do not equal production in which case any difference should be capitalized as an asset and amortized over future periods. d. fixed production costs should be charged to the period in which they are incurred.
When contribution is positive but equal to fixed cost: a. There is loss less than fixed cost b. There is loss equal to fixed cost c. There is loss more than fixed cost d. There will be neither profit nor loss
What is the term used to describe costs that increase in steps? A. Variable costs B. Fixed costs C. Mixed costs D. Semi-fixed costs
Which of the following best describes a fixed cost? A. It may only change in total when such change is unrelated to changes in production volume (i.e. inflation). B. It may change in total when such change is related to changes in production volume. C. It is constant per unit of change in production volume. D. It may change in total when such change depends on production volume within the relevant range. QUESTION 2 Period costs are best described as those costs: A. Incurred periodically (i.e. not on a regular basis). B. Incurred as a result of activities that occur inside the production building. C. That increase as a result of a change in volume for a particular period. D. Incurred as a result of activities that occur outside of the production building. QUESTION 3 What is the result when the contribution margin ratio increases? A. Break-even point increases B. Fixed Cost…
The focus of a sell or process further decision is Select one: a. incremental cost. b. incremental revenue. c. neither incremental revenue nor incremental cost. d. both incremental revenue and incremental costs.
A. What is the net income under variable costing method?B. What is the net income under absorption costing method?
Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs are linear b. Sales mix of products sold does not change c. Selling price per unit changes with volume d. Costs can be divided into variable and fixed components e. Fixed cost per unit is not constant