Under variable costing, all fixed manufacturing costs are treated as a a. product cost included in the cost of goods manufactured. b. product cost included in the cost of ending inventory. c. period expense deducted from manufacturing margin. d. period expense deducted from contribution margin.

In cost terms, direct labor cost is included inA. Manufacturing costsB. Prime costsC. Conversion costsD. B and CE. A, B and C

2. Distinguish between product costs and period costs. 6. What is the difference between gross margin and manufacturing margin?

The equation for total costs (Y) is: Y = a+ bX In this equation, “a” represents:  Net income Cost of goods sold Total fixed costs The level of activity (e.g., the number of units produced) Total variable costs Variable cost per unit of X Total revenue

3.Activity based costing (ABC) is a method of allocating the indirect costs of sales commissions to products. A. true b. false

What is  the difference between variable costing and absorption costing income statements? a.      Provide a hypothetical income statement in both formats in which the number of units sold is different from the number of units manufactured. b.     Explain the contrast between the two formats.

A cost that has characteristics of both a variable cost and a fixed cost is called a Oa. variable/fixed cost Ob. sunk cost Oc. discretionary cost Od, mixed cost

The three major cost components of manufacturing a product are,

7. Which of the following is the best definition of a variable cost? A. A variable cost is one which is directly traceable to an activity of the business for which the cost will be used. B. A variable cost is one which is associated with goods or services purchased, or produced, for sale to customers. C. A variable cost is one which changes with changes in the level of activity, over a defined period of time. D. A variable cost is one which is spread over a number of activities of the business for which costs are to be determined.

What is the key difference between Absorption Costing and Marginal Costing?   A Absorption Costing treats Manufacturing Overhead as a period cost.   B Marginal Costing treats Fixed Manufacturing Overhead as a period cost.   C Absorption Costing only considers variable costs to calculate net income.   D Marginal Costing only considers variable costs to calculate net income.