Rebel Company manufactures a single product and has the following cost structure: Variable cost per unit Fixed Costs Production P5 Production P32,000 Selling & administrative Selling & administrative 16,000 During the year, 8,000 units were produced, and 7,800 units were sold.

Rebel Company manufactures a single product and has the following cost structure: Variable cost per unit Fixed Costs Production P5 Production P32,000 Selling & administrative Selling & administrative 16,000 During the year, 8,000 units were produced, and 7,800 units were sold.

Name: 3. The carrying value of ending inventory under variable costing would
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Description: 3. The carrying value of ending inventory under variable costing would be: _________. Present as is if higher or present it in parenthesis if it is less ex: (200)4. Under absorption costing, the cost of goods sold would be: Rebel Company manufactures

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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Which of the following statements regarding absorption and variable costing is correct? A Absorption costing results in higher income when 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 two costing methods.
Product costs under variable costing are typically: Group of answer choices A. higher than under absorption costing B. lower than under absorption costing C. the same as with absorption costing D. higher than absorption costing when inventory increases
When units manufactured exceed units sold, variable costing income Oa. is less than absorption costing income Ob. is greater by the number of units produced multiplied by the variable cost ratio Oc. is greater than absorption costing income Od. equals absorption costing income
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
Product costs under variable costing are typically: Question 1 options: lower than under absorption costing higher than under absorption costing the same as with absorption costing higher than absorption costing when inventory increases
How do costs behave when there is a change in volume?a) ______ increases or decreases in total in direct proportion to increases or decreases in sales volume. b) ______ remains the same in total, regardless of change in sales. c) ______ have both a variable and fixed component. d) Answer the following regarding the high-low method:i) What is the formula for determining the variable costs when using the high low method:ii) Given the following information for the high and low levels, what is the variable cost per unit and the total fixed costs? iii) Based on the information in part ii), what is the relevant range?In MyAccountingLab, complete Try It! 21-1 and S21-1 through S21-3.LO2. What is contribution margin, and how is it used to compute operating income?a) What is the contribution margin if net sales revenue is $100,000 and variable costs are $40,000? b) Based on the information in part a), what is the contribution margin ratio?In MyAccountingLab, complete Try It! 21-2 and S21-4 and…
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Which of the following statements about profit measurement under absorption and marginal costing is not true (assuming that unit variable costs and fixed costs are constant)? O A. If inventory levels increase then profits measured using absorption costing will be higher than profits measured using marginal costing. O B. If inventory levels decrease then profits measured using marginal costing will be higher than profits measured using absorption costing. OC. Profits measured using absorption costing will be either lower or higher than profits measured using marginal costing. O D. Profits measured using absorption costing may be the same as, or lower than, or higher than profits measured using marginal costing.
Match each phrase that follows with the term it describes.
TRUE/FALSE. Write T' if the statement is true and 'F' if the statement is false. 17) Target costing sets prices by computing an average cost and then adding a desired markup.
Break-even is the number of units at which? a. total revenue equals price times quantity b. total revenue equals total variable cost c. total revenue equals total fixed cost d. total revenue equals total cost
Which of the following statement 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 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.