La Lisa uses FIFO for inventory costing: Beginning Inventory 300 units Units Produced 600 Units Sold 600 Prior year Budgeted Fixed Overhead Rate P 50/unit Current year Budgeted Fixed Overhead Rate P 44/unit Which of the following statements is true about the difference between absorption-costing and variable-costing operating income? Absorption-costing is P 1,800 less than variable-costing operating income. Absorption-costing is P 1,800 more than variable-costing operating income. Absorption-costing is P 15,000 less than variable-costing operating income. Absorption-costing is P 15,000 more than variable-costing operating income.

Q: RUE OR FALSE Net income under GAAP highlights differences between variable and fixed costs.

A: Answer:   Net income under GAAP highlights differences between variable and fixed costs.   The…

Q: What is Unit-Profit or Unit-Cost Calculation?

A: Cost:   It is the economic value of resources incurred by a firm to manufacture a product or render…

Q: how does the contribution margin pricing method differ from ratio pricing method?

A: The question is based on the concept of pricing policy and methods. The product's price can be…

Q: Which of the following is a carefully predetermined cost that is usually expressed on a per unit of…

A: Cost: In accounting, the cost is related to monetary value spend on raw material, services, and…

Q: Gross margin is to absorption costing as which of the following is too variable costing?   A.…

A: Variable costing uses Contribution Margin Income Statement by showing Sales – VARIABLE expenses =…

Q: Which method results in a more realistic amount for income because it matches the most current costs…

A: The current costs is based on the purchasing of the latest products which means the having book…

Q: Explain the difference between the variable and absorption costing methods.

A: Under Variable Costing method, only variable costs are considered which includes only variable cost…

Q: Explains the effect on profit of using variable (marginal) and absorption costing.

A: The income statement can be prepared using various methods as absorption costing and variable…

Q: Explain the difference between direct costs and indirect cost

A: Direct cost is the cost incurred by the organization while performing their center business process…

Q: Which of statements about the contribution income statement is correct? Group of answer choices

A: A contribution income statement is defined as the statement in which all the variable costs and all…

Q: What effect do minor deviations from the EOQ have on totalinventory cost?

A: Minor variations from the EOQ will not in general highly affect the total inventory cost except if…

Q: How is the distinction between direct and indirect costs handled differently under volume-based…

A: Activity-based costing: It is a method that helps in finding the activities performed by a company…

Q: What is variable costing? How does it differ from absorpotion costing? Which can better be used to…

A: Variable Costing is a costing method where variable expenses change in proportion with production.…

Q: Show income comparison's of absorption and variable costing?

A: Absorption costing method can be defined as the all the costs that is associated with the production…

Q: iable costs in the context of cost-volume-profit (CPV) analysis?  b. Fixed costs in the context of…

A: Cost volume profit analysis is very important for the companies because it tells them that whether…

Q: Define the following concepts: a)Prime cost    b) Non production cost         c)Total cost

A: Cost is the monetary value of expenditures for raw materials, technology, supplies, services, labor,…

Q: Why is it necessary to distinguish between variable and fixed costs when dealing with mixed costs

A: Introduction:- Every Business expenses are classified as either fixed or variable costs. on other…

Q: When will NOI under the variable costing method show higher income than under the absorption costing

A: Net Operating Income: It is a calculation used to assess the profitability of the business.

Q: There are three categories of costs: fixed costs, variable costs and semi-variable costs. Which of…

A: Semi-variable cost includes both fixed and variable costs. In this, most of the part is fixed but…

Q: Which of the following costs change in total directly and proportionately with respect to the…

A: The objective of the question is to identify the type of cost that changes in total directly and…

Q: What are the various levels of aggregation to which the lower of cost and net realizable value rule…

A: LCNRV (Lower of Cost or Net Realizable Value) approach: It is an approach that compares the cost of…

Q: What type of cost is included in economic costs, but not included in accounting costs?a. Explicit…

A: Economic costs are the costs in which consideration is given to opportunity costs as well.

Q: Describe the Unit-Profit or Unit-Cost Calculation?

A: A unit cost is a net expense a firm has incurred to manufacture, store, and sell one unit of a…

Q: In CVP Analysis, total costs are defined as costs derived from product costs and period costs. TRUE…

A: Cost-volume-profit analysis is used to determine how the company's profit has been affected due to…

Q: Which one of the following is another name for product costs? Select one: a. Direct costs b. Period…

A: Product cost means the cost of producing one unit of finished goods.

Q: Describe the differences in the ways that prior-period costs and output are treated under the…

A: Process costing is one of the costing technique which is used for products which has to go through…

Q: What are the three primary cost flow assumptions? How does the specific identification method differ…

A: Inventory: Inventory refers to the stock of goods purchased, utilized and maintained by the company…

Q: Explain how the accounting definition of an asset is related to the choice between absorption and…

A: Absorption costing:   Absorption costing is compulsory under Generally Accepted Accounting…

Q: Explain the difference between  - Absorption and Marginal Costing

A: The Question has covered the concept of Absorption and Marginal Costing. Absorption Costing The…

Q: in which cases is it preferable to prepare the income statement based on marginal costing? Justify…

A: Income statement refers to the statement which is being prepared by the business in order to…

Q: What are the advantages and disadvantages of ABC relative to the step-down method of cost…

A: ABC means Activity Based Costing. Costs will be allocated based on the activities the organization…

Q: Which are the causes for any differences in the cost using ABC priciples

A: Costing is a technique in which the different costs incurred by the business entity are analyzed and…

Q: Describe income statement under variable costing.

A: Income statement: The financial statement which reports revenues and expenses from business…

Q: key different in accounting for costs between absorption and variable costing

A: Absorption costing and variable costing are two methods of costing products.

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.