For each of the items listed below, select the cost that most likely apply. Note: Select "Not Applicable" if the item doesn't fall in any of the cost category Direct labor Interest expense Sales commissions Utility costs President's salary Wages of assembly-line workers Repairs and maintenance costs Materials-handling costs Executive compensation Salesperson's salary X Answer is complete but not entirely correct. Product Direct Indirect Indirect Indirect Indirect Direct Indirect Indirect Indirect Direct ✓Variable X Period and fixed x Variable Variable Period and fixed Variable Variable Variable X Period and fixed X Period and fixed XX333X< Period, Variable and Fixed ✓ ✓ ✓ X X ✓ ✓ X ✓

For each of the items listed below, select the cost that most likely apply. Note: Select "Not Applicable" if the item doesn't fall in any of the cost category Direct labor Interest expense Sales commissions Utility costs President's salary Wages of assembly-line workers Repairs and maintenance costs Materials-handling costs Executive compensation Salesperson's salary X Answer is complete but not entirely correct. Product Direct Indirect Indirect Indirect Indirect Direct Indirect Indirect Indirect Direct ✓Variable X Period and fixed x Variable Variable Period and fixed Variable Variable Variable X Period and fixed X Period and fixed XX333X< Period, Variable and Fixed ✓ ✓ ✓ X X ✓ ✓ X ✓

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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Question

For each of the items listed below, select the cost that most likely apply.
Note: Select "Not Applicable" if the item doesn't fall in any of the cost category
Direct labor
Interest expense
Sales commissions
Utility costs
President's salary
Wages of assembly-line workers
Repairs and maintenance costs
Materials-handling costs
Executive compensation
Salesperson's salary
> Answer is complete but not entirely correct.
Product
Direct
Indirect
Indirect
Indirect
Indirect
Direct
Indirect
Indirect
Indirect
Direct
Period, Variable and Fixed
✓Variable
XPeriod and fixed
x Variable
✓Variable
X Period and fixed
✓Variable
Variable
✓Variable
X Period and fixed
XPeriod and fixed
Xx

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When using the high-low method to estimate costs, the formula “Change in Cost divided by Change in Units” (or “Change in Total Cost divided by Change in Activity Level”) is used to estimate the: Fixed cost per unit Mixed cost per unit Profit per unit Indirect cost per unit Variable cost per unit Differential cost per unit Opportunity cost per unit
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
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Which of the following line items will not be found in the absorption costing income statement? Group of answer choices Variable manufacturing and non-manufacturing costs Contribution margin Gross profit Fixed manufacturing costs
Variable costing is concerned with the variable costs and includes direct material, direct labor, and variable manufacturing overhead. The fixed manufacturing overhead is treated as a cost of the period under variable costing. Absorption costing uses the costs in variable costing and the per-unit cost of fixed manufacturing overhead. When inventory increases, the ending inventory includes a portion of the fixed manufacturing overhead in absorption costing. True / False
Which of the following costs is most likely to be classifled as a fixed cost? Multiple Cholce Direct materials Sales commissions Direct labor Property taxes Shipping costs
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
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 would be included in product costs under both absorption costing and variable costing is: supervisory salaries. variable selling expenses. factory rent. variable manufacturing costs.
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.