Which of the following statements pertain to variablecosting?a. This method must be used for external financialreporting.b. Fixed manufacturing overhead is attached to eachunit produced.c. The income statement not does disclose a company'scontribution margin.d. Variable manufacturing overhead becomes part of aunit's cost.e. None of the other answers are correct.

Background: Variable CostingUnder variable costing, only variable manufacturing costs (direct…

Answered: Which of the following statements…

Accounting Information Systems

10th Edition

ISBN:9781337619202

Author:Hall, James A.

Publisher:Hall, James A.

Chapter7: The Conversion Cycle

Section: Chapter Questions

Problem 9MCQ: Which of the following statements regarding traditional accounting is true? a. Traditional...

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7. Which of the following statement is false? Multiple Choice a)The contribution margin income statement format separates costs according to cost behaviour. b)Fixed manufacturing overhead is treated as a period cost under absorption costing method. c)Fixed manufacturing overhead is treated as a product cost under absorption costing method. d)Variable costing method is more useful than absorption costing approach in internal and managerial decision-making. e)The absorption costing approach is used in external financial reporting.
Which of the following statements regarding traditional accounting is true? a. Traditional accounting does not provide managers in a JIT setting with timely information. b. The financial orientation allows for effective measuring disparate items. c. Overhead allocations may lead to cost distortions. d. All of the above are true statements. e. A and C are true, but B is not true.
For each situation, list the assumption, principle, or constraint that has been violated, if any. List only one answer for each situation. a. East Lake Company recognizes revenue at the end of the production cycle but before sale. The price of the product, as well as the amount that can be sold, is not certain. choose one of the assumption, principle or constraint Going concern assumptionPeriodicity assumptionNo violationHistorical cost principleRevenue recognition principleEconomic entity assumption b. Hilo Company is in its fifth year of operation and has yet to issue financial statements. (Do not use the full disclosure principle.) choose one of the assumption, principle or constraint Historical cost principleGoing concern assumptionRevenue recognition principleNo violationPeriodicity assumptionEconomic entity assumption c. Gomez, Inc. is…
Which of the following is true of the contribution margin income statement? a. Selling costs are never included in the calculation of the contribution margin. b. The contribution margin is the amount that is available to cover fixed costs. c. Both fixed and variable manufacturing costs are deducted to calculate the contribution margin. d. All of the other answers are incorrect.
Which of the following statements is false? Multiple Choice In general, the term expense is used for managerial purposes, while the term cost refers to external financial reports. An opportunity cost is the benefit forgone by selecting one alternative over another. An outlay cost is a past, present, or future cash outflow. A cost is a sacrifice of resources.
Which of the following statements is FALSE? a. There is a cause-and-effect relationship between the cost driver and the amount of cost. b. Over the long run all costs have cost drivers. c. Volume of production is a cost driver of direct manufacturing costs. d. Fixed costs have cost drivers over the short run.
Which of the following is NOT an objective of determining product costs for manufacturing firms? A) To determine selling prices B) to reduce operating leverage C) to make decisions D) to do financial reporting
Indirect cost is the cost that cannot be directly attributed to the production as these costs are incurred in general and can be fixed or variable in future. True or false
Which of the following statements is true? (You may select more than one answer.)a. A common cost is one type of direct cost.b. A sunk cost is usually a differential cost.c. Opportunity costs are not usually recorded in the accounts of an organization.d. A particular cost may be direct or indirect depending on the cost object.
1. Product costs are expensed on the balance sheet statement in the period incurred (true or false). 2. Direct labor is period Cost (true or false) 3. Non-manufacturing costs are not treated as period costs (true or false)
Cost accounting depends entirely on historical information. Select one: True False
Misleading cost numbers are most likely the result of misallocating: A) direct material costs B) direct manufacturing labor costs C) indirect costs D) All of these answers are correct.

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