What amount should be reported on Birk Camera Shop's financialstatements, assuming the lower-of-cost-or-market rule is applied?The variable costing method ordinarily includes in product costs thefollowing:a) Direct materials cost, direct labor cost, but no manufacturingoverhead cost.b) Direct materials cost, direct labor cost, and variable manufacturingoverhead cost.c) Prime cost but not conversion cost.d) Prime cost and all conversion cost.

The correct answer is:b) Direct materials cost, direct labor cost, and variable manufacturing…

Answered: What amount should be reported on Birk…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter12: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 4SEQ: For which cost concept used in applying (he cost-plus, approach to product pricing are fixed...

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Similar questions

In the variable costing income statement, how are the fixed manufacturing costs reported, and how are the fixed selling and administrative expenses reported?
From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences: a. A product, sales territory, department, or activity to which costs are traced is called a (direct cost, cost object). b. Advertising costs are usually viewed as (period, product) costs. c. Factory overhead costs combined with direct labor costs are called (prime, conversion) costs. d. Feedback is often used to (improve, direct) operations. e. A sacrifice made to obtain some benefit is a (cost, expense). f. The balance sheet of a manufacturer would include an account for (cost of goods sold, work in process inventory). g. The implementation of automatic, robotic factory equipment normally (increases, decreases) the direct labor component of product costs.
On an income statement prepared using variable costing, to calculate contribution margin, a company will subtract what from sales? Question options: a) variable manufacturing costs. b) variable manufacturing and operating costs. c) variable cost of goods sold. d) cost of goods sold.
The major categories or captions that would appear on an income statement prepared in the variable costing format are as follows: Contribution margin Fixed costs Manufacturing margin Operating income Sales Variable cost of goods sold Variable selling and administrative expenses a. Arrange these captions in the proper order in accordance with the variable costing concept. b. Which of the captions represents: 1. The difference between sales and the total of all the variable costs and expenses. 2. The remaining amount of revenue available for fixed manufacturing costs, fixed expenses, and net income?
When using the product cost method of applying the cost-plus approach to product pricing, which of the following is included in the markup? Oa. total fixed manufacturing costs, total fixed selling and administrative expenses, and desired profit b. desired profit Oc. total costs plus desired profit Od. total selling and administrative expenses plus desired profit
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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.
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
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
When using the total cost concept of applying the cost-plus approach to product pricing, what is included in the markup? Total costs plus desired profit Desired profit Total selling and administrative expenses plus desired profit Total fixed manufacturing costs, total fixed selling and administrative expenses, and desired profit
Which of the following statement is false? O The only difference between absorption costing and variable costing is howthe variable MOH is treated. O A traditional income statement uses absorption costing, where both variableand fixed manufacturing costs are included when calculating the productcost. O For external financial reporting purposes, GAP requires the traditionalformat income statement. O For external financial reporting purposes, companies need to classify theircosts as product costs or period costs following GAAP.
How is operating income affected if the number of units sold exceeds the number of units produced? Select one: a. Operating income would be higher under a variable costing income statement. b. Operating income would be lower under a variable costing income statement. c. Operating income would be higher under an absorption costing income statement. d. Operating income would be the same under both a variable costing and absorption costing income PreviousSave AnswersNext

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