Question 39How do you categorize if you are reporting packaging supplies for shipping overseas?OA) Variable cost and direct costB) Fixed cost and indirect costOC) Variable cost and selling costD) Fixed cost and general and administrative cost

The costs incurred for production are said to be the production costs. The costs incurred to sell…

Answered: Question 39 How do you categorize if…

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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Chapter 3- CVP Cost-volume-profit (CVP) analysis requires an understanding of cost behavior: variable and fixed costs. Cost behavior differs from the GAAP-based financial reporting focus: product and period costs. The two ways to categorize costs results in TWo different income statements: Absorption costing income statement: S-C-GM-SA-NI (Key assumption: Split costs into product and period costs) Variable costing income statement: S-VE-CM-FE-NI (Key assumption: Split costs into variable and fixed) 1. 2. Absorption Costing Income Statement Variable Costing Income Statement Sales $500,000 Sales $500,000 Less: Variable expenses Less: Cost of goods sold: Variable (DM+DL+VOH) Fixed (FOH) Gross margin 100,000 Product costs 100,000 60,000 S&A costs 110,000 340,000 Contribution margin 290,000 Less: Fixed expenses Less: Selling & administrative Variable 110,000 Product costs 60,000 Fixed 140,000 S&A costs 140,000 Taxable income $90,000 Taxable income $90,000 LINK THE LINEAR COST FUNCTION TO…
7
Sunland Products manufactures and sells a variety of camping products. Recently the company opened a new factory to manufacture a deluxe portable cooking unit. Cost and sales data for the first month of operation are shown below: Beginning inventory Units produced Units sold Manufacturing costs Fixed overhead Variable overhead Direct labour Direct material Selling and administrative costs Fixed Variable 0 units 11,200 10,100 $100,800 $3 $12 $28 $207,100 per unit. per unit per unit $3 per unit sold The portable cooking unit sells for $110. Management is interested in the opening month's results and has asked for an income statement.
17 What factor is the cause of the difference between operating income computed using absorption costing and operating income computed using variable costing? Select one: a. Absorption costing includes all fixed manufacturing costs in product costs, but variable costing expenses all fixed manufacturing costs. b. Absorption costing considers all manufacturing costs in the determination of operating income, whereas variable costing considers only prime costs. c. Absorption costing allocates fixed manufacturing costs between cost of goods sold and inventories, and variable costing considers all fixed manufacturing costs as period costs. d. Absorption costing includes all variable manufacturing costs in product costs, but variable costing considers variable manufacturing costs to be period costs.
The _________ is considered part of the cost of the product in absorption costing, but not in variable costing. Group of answer choices Variable Overhead Fixed Overhead Variable Selling & Administrative Fixed Selling and Administrative In the absorption income statement, Sales less Cost of Goods Sold is the calculation for: Group of answer choices Contribution margin Gross margin Net Income Operating Income
The inventory cost computed under absorption costing is ____ the inventory cost computed using variable costing. Group of answer choices half of thrice as much equal to greater than
QUESTION 23 Expenses can be categorized by whether the cost incurred is directly related to production or not. If directly related, it will not change with the production level, thus called Fixed Cost. If directly related, it will change with the production level, thus called Fixed Cost. If not directly related, it will not change with the production level, thus called Variable Cost. If not directly related, it will change with the production level, thus called Variable Cost. None of the above is a correct statement.
QUESTION 28 Which of the following is not a reason for cost allocation? A. Maximization of direct cost efficiency B. Cost-based reimbursement C. Cost determination of product or service D. Cross-department monitoring

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Question 39 How do you categorize if you are reporting packaging supplies for shipping overseas? OA) Variable cost and direct cost B) Fixed cost and indirect cost OC) Variable cost and selling cost D) Fixed cost and general and administrative cost