Under variable costing, fixed manufacturing overhead is expensed at the time the units are produced. Under absorption costing, fixed manufacturing overhead is expensed at the time the units are sold. True or False True False

Under variable costing, fixed manufacturing overhead is expensed at the time the units are produced. Under absorption costing, fixed manufacturing overhead is expensed at the time the units are sold. True or False True False

Name: Under variable costing, fixed manufacturing overhead is expensed at t
Uploaded: 2024-03-20T06:32:49.000Z
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Description: Under variable costing, fixed manufacturing overhead is expensed at the time the units are produced. Under absorption costing, fixed manufacturing overhead is expensed at the time the units are sold.True or FalseTrueFalse

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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Please indicate which are product costs and which are period costs. Under Absorption Costing: Direct Materials are considered a Direct Labor is considered a Variable overhead is considered a Fixed overhead is considered a Under Variable Costing: Direct Materials are considered a Direct Labor is considered a Variable overhead is considered a Fixed overhead is considered a
Which of the following statements is true? O a. Activity-based costs per unit are always greater than volume-based costs per unit. O b. All the statements are false. O c. Different cost allocation methods are constructed so that they typically result in the same or similar estimates of how much it costs to make a product. O d. Activity-based costing typically provides less information about product costs while requiring more recordkeeping. O e. Volume-based costing has typically resulted in overcost for high-volume products and undercost for low-volume products. 11:40 ere to search A D a dx ENG 22-05-2021 hp delete home end an Ed 96 & 7\ 6. + backspace mum lock RO 7 V home g up K enter 50 pause B t shift 2Y end alt ctrl ins
Discuss how traditional methods of allocating overhead to products may not provide a good measure of overhead resources used. How might activity based costing overcome these limitations?
Which among the following is not true about traditional costing system? a. This method allocates greater proportion of overheads to high volume products b. This method avoids the phenomenon of product cost cross subsidization c. This method allocates smaller proportion of overheads to low volume products d. This method leads to cost smoothing
Underallocated overhead occurs when: A) allocated overhead costs are less than actual overhead costs. B) actual overhead costs are less than allocated overhead costs. C) estimated overhead costs are greater than budgeted overhead costs. D) estimated overhead costs are greater than actual overhead costs.
What is the key difference between Absorption and Variable Costing? A Full Costing treats Manufacturing Overhead as a period cost B Variable Costing treats Fixed Manufacturing Overhead as a period cost C Absorption Costing only considers variable costs to calculate net income D Variable Costing only considers variable costs to calculate net income
In activity-based costing, some manufacturing costs may be excluded from product costsTRUEFALSE
Which of the following is not a method of cost absorption? (a) Percentage of direct material cost (b) Machine hour rate (c) Labour hour rate (d) Repeated distribution method
If the actual overhead costs incurred are in excess of the applied overhead costs, the difference is called what? a) Predetermined overhead rate b) Underapplied overhead c) Overapplied overhead d) Gross margin
Explain the difference between the cost classifications, ‘production prime costs’ and ‘indirect production overheads’, and discuss the cost accounting applications of the differences used for traditional absorption costing purposes [dont give chatgpt answer]
f) ‘Process costing is a term used in cost accounting to describe one method for collecting and assigning manufacturing costs to the units produced.’ There are some statements about the process costing: An abnormal loss occurs when expected output exceeds actual output. The scrap value of an abnormal loss is credited to the process account. The allocated cost of an abnormal gain is credited to the process account. The inputs to a process less the normal loss is the expected output. The normal loss in a process is allocated a cost in order to reconcile the costs of inputs and outputs. The FIFO method assumes opening WIP is the first group of units to be completed. Therefore, opening WIP is charged separately to completed production and CPU is based on current period costs. Required: Please identify which of the above statements are false and explain the reasons.
ABC costing attempts to apply: A) all manufacturing costs more accurately. B) manufacturing overhead more accurately. C) both manufacturing overhead and nonmanufacturing overhead more accurately. D) raw material, direct labor and manufacturing overhead more accurately. only financial risks and opportunities