24. If a firm uses variable costing, a. its product costs include variable selling and administrative costs. b. its profits with sales. c.it calculates an idle facility variation. d. its product cost per unit changes because of changes in the number of units produced. 25. The inventory costing method that treats direct manufacturing costs and indirect manufacturing costs, both variable and fixed, as inventoriable costs is called a. variable costing b. Absorption costing c. conversion costing d. perpetual inventory 26. Which of the following statements regarding absorption and variable costing is correct? a. Absorption costing results in higher income when finished goods inventory increases. b. Variable manufacturing costs are lower under absorption costing. c. Overhead costs are treated in the same manner under both variable and absorption costing methods. d. Profits are always the same under the two costing methods. 27. Which of the following cost items is not correctly accounted for as a product cost under absorption and variable costing? PRODUCT COST UNDER ABSORPTION. VARIABLE a. Shipping costs No No b. Straight-line depreciation Yes Yes c. Factory supplies Yes Yes d. Direct Materials Yes Yes

24. If a firm uses variable costing, a. its product costs include variable selling and administrative costs. b. its profits with sales. c.it calculates an idle facility variation. d. its product cost per unit changes because of changes in the number of units produced. 25. The inventory costing method that treats direct manufacturing costs and indirect manufacturing costs, both variable and fixed, as inventoriable costs is called a. variable costing b. Absorption costing c. conversion costing d. perpetual inventory 26. Which of the following statements regarding absorption and variable costing is correct? a. Absorption costing results in higher income when finished goods inventory increases. b. Variable manufacturing costs are lower under absorption costing. c. Overhead costs are treated in the same manner under both variable and absorption costing methods. d. Profits are always the same under the two costing methods. 27. Which of the following cost items is not correctly accounted for as a product cost under absorption and variable costing? PRODUCT COST UNDER ABSORPTION. VARIABLE a. Shipping costs No No b. Straight-line depreciation Yes Yes c. Factory supplies Yes Yes d. Direct Materials Yes Yes

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Description: 24. If a firm uses variable costing,a. its product costs include variable selling and administrative costs.b. its profits with sales.c.it calculates an idle facility variation.d. its product cost per unit changes because of changes in the number of

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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True or false Give answer of all with explanation.
Which of the following is a correct statement? O A. the fixed manufacturing cost is based on a per unit cost, when using Variable Costing O B. the fixed manufacturing cost is based on a per unit cost, when using Absorption Costing and a total cost, when using Variable Costing Oc the variable manufacturing cost is shown as a total cost in both Variable Costing and Absorption Costing O D. the fixed manufacturing cost is always shown as a total cost, when using Absorption Costing
The product costing method that includes fixed manufacturing cost in inventories costs is called Select one: Variable costing. O a. Ob. Direct costing. O c. Absorption costing. Od. Contribution margin. The strategy MOST likely to reduce the breakeven point would be to: Select one: Oa. Decrease the fixed costs and increase the contribution margin. Ob. Increase both the fixed costs and the contribution margin. on Increase the fixed costs and decrease the contribution margin. d. Decrease both the fixed costs and the contribution margin.
21. Which of the following statements is correct? a. In a variable costing income statement, sales revenue is typically higher than in absorption costing income statement. b. When production is not equal to sales, income under absorption costing differs from income under variable costing due to the difference in treatment (product cost and period cost) of the fixed overhead cost under the two costing methods. c. In a variable costing system, fixed overhead cost is included as part of the cost of inventory. d. In an absorption costing system, fixed overhead cost is treated as a period cost
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Sunland Products manufactures and sells a variety of camping products. Recently the company opened a new factory to manufacture a deluxe portable cooking unit. Cost and sales data for the first month of operation are shown below: Beginning inventory Units produced Units sold Manufacturing costs Fixed overhead Variable overhead Direct labour Direct material Selling and administrative costs Fixed Variable 0 units 11,200 10,100 $100,800 $3 $12 $28 $207,100 per unit. per unit per unit $3 per unit sold The portable cooking unit sells for $110. Management is interested in the opening month's results and has asked for an income statement.
3.Activity based costing (ABC) is a method of allocating the indirect costs of sales commissions to products. A. true b. false
The _________ is considered part of the cost of the product in absorption costing, but not in variable costing. Group of answer choices Variable Overhead Fixed Overhead Variable Selling & Administrative Fixed Selling and Administrative In the absorption income statement, Sales less Cost of Goods Sold is the calculation for: Group of answer choices Contribution margin Gross margin Net Income Operating Income
The inventory cost computed under absorption costing is ____ the inventory cost computed using variable costing. Group of answer choices half of thrice as much equal to greater than
A cost that would be included in product costs under both absorption costing and variable costing is: supervisory salaries. variable selling expenses. factory rent. variable manufacturing costs.
Variable costing has an advantage over absorption costing for which of the following purposes? all of the choices mentioned analysis of profitability of products, territories, and other segments of a business determining the CVP relationship among the major factors of selling price, sales mix, and sales volume minimizing the effects of inventory changes on net income
Which of the following statements correctly complete the sentence:"Gross Margin equals":I. sales revenue less (minus) cost of goods sold.II. contribution margin less (minus) fixed costs.III. operating income plus all period costs.IV. sales revenue less (minus) cost of goods manufactured.