Under variable costing: a. net operating income will tend to move up and down in response to changes in levels of production. b. inventory costs will be lower than under absorption costing. c. net operating income will tend to vary inversely with production changes. d. net operating income will always be higher than under absorption costing.
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- Under variable costing: a. Net operating income will always be higher than under absorption costing. b. Net operating income will tend to move up and down in response to changes in levels of production. O c.Inventory costs will be lower than under absorption costing. d. Net operating income will tend to vary inversely with production changesUnder variable costing a. Net income will tend to vary inversely with production changesb. Net income will always be higher than under absorption costingc. Inventory costs will always be lower than under absorption costingd. Net income will tend to move upward and downward in response to changes in levels of productionWhich of the following is NOT true of variable costing? a. Profits may increase though sales decrease. b. Profits fluctuate with sales. c. The cost of the product consists of all variable production costs. d. The income statement under variable costing does not include overhead volume variance.
- TRUE OR FALSE Net income under variable costing is closely tied to changes in sales levels.Which of the following statements is TRUE? O A. Variable costs per unit decrease as production levels increase. O B. Fixed costs per unit decrease as production levels increase. OC. Total indirect costs are always greater than total direct costs. O D. Direct costs are usually overheads.Variable costing income will be greater than absorption costing income when: a. Sales is greater than production. b. contribution pricing is applied c. Production is less than or equal to sales. d. Production is greater than sales
- What is happening to average costs when marginal cost is greater than average cost at a specific production level? A. Average cost is decreasing B. Average cost and marginal cost are equal C. Average cost is increasing D. Average cost is not changing AProduct 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 increasesWhat is characteristic of variable costs within the relevant range? A. Decrease in total as as output increases B. Stay constant in total as output increases C. Decrease on a per-unit basis as output increases D. Stay constant on a per-unit basis as output changes
- Which of the followings is not correct about cost-based pricing? Select one: a. Total fixed costs change as the production amount changes. b. Total costs are the sum of total fixed and variable costs. c. Total variable costs increase due to a rise in production level. d. Variable costs per unit tend to be constant with respect to number of units produced.Which of the following best describes a fixed cost? A. It may only change in total when such change is unrelated to changes in production volume (i.e. inflation). B. It may change in total when such change is related to changes in production volume. C. It is constant per unit of change in production volume. D. It may change in total when such change depends on production volume within the relevant range. QUESTION 2 Period costs are best described as those costs: A. Incurred periodically (i.e. not on a regular basis). B. Incurred as a result of activities that occur inside the production building. C. That increase as a result of a change in volume for a particular period. D. Incurred as a result of activities that occur outside of the production building. QUESTION 3 What is the result when the contribution margin ratio increases? A. Break-even point increases B. Fixed Cost…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.