General Account. Under variable costing, producing more units than the number of units sold in a period will (a) cause net operating income for the period to decrease (b) cause net operating income for the period to increase (c) have no effect on net operating income for the period.

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…

Under absorption costing, fixed manufacturing overhead costs are:A. are deferred in inventory when production exceeds sales.B. are always treated as period costs.C. are released from inventory when production exceeds sales.D. none of the above

Net operating income computed under variable costing would exceed net operating income computed using absorption costing if: Multiple Choice   units sold exceed units produced.   units sold are less than units produced.   units sold equal units produced.   the average fixed cost per unit is zero.

When units produced are less than units sold, how does operating income differ between variable costing and absorption costing? Why?

Under variable costing: a. Net operating income will always be higher than under absorption costing. b. Net operating income will tend to move up and down in response to changes in levels of production. O c.Inventory costs will be lower than under absorption costing. d. Net operating income will tend to vary inversely with production changes

True or False Product cost under Variable costing are DM, DL and VOH only.     Under absorption costing, FOH is considered as indirect product cost. 3. Depreciation cost is always product cost   4. Depreciation cost is always period cost   5. Selling expense if always part of period cost, regardless of product costing system   6. Income under absorption is always greater than variable costing because of deferment of FOH 7. Selling cost is treated as expenses under variable costing.    8. If sales for a period exceeds production, then variable costing income will be higher than absorption costing income

Operating income reported under full costing will exceed operating income reported under variable costing for a given period if:   Multiple Choice   The variable overhead exceeds the fixed overhead.   Production exceeds sales for that period.   Production equals sales for that period.   Sales exceed production for that period.

Cost Accounting

Which of the following statements is TRUE? O A. Variable costs per unit decrease as production levels increase. O B. Fixed costs per unit decrease as production levels increase. OC. Total indirect costs are always greater than total direct costs. O D. Direct costs are usually overheads.