Which one of the following is correct about variable costing systems? Select one: a. Normally result into a higher product cost compared to absorption costing systems b. Calculate product cost as the sum of directs materials, direct labor and manufacturing overhead costs x c. Product cost does not include variable selling expenses. d. Focuses on both variable and fixed costs.

Which one of the following is correct about variable costing systems? Select one: a. Normally result into a higher product cost compared to absorption costing systems b. Calculate product cost as the sum of directs materials, direct labor and manufacturing overhead costs x c. Product cost does not include variable selling expenses. d. Focuses on both variable and fixed costs.

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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Which of the following is not a potential advantage of variable costing relative absorptioncosting?a. Net income computed under variable costing is unaffected by changes productionlevels.b. It is easier to understand the impact of fixed and variable costs on computation of netincome when variable costing is used.c. The use of variable costing is consistent with cost-volume-profit analysis.d. Net income computed under variable costing is not closely tied to changes in sales level.
What is the key difference between Absorption and Variable Costing? A Full Costing treats Manufacturing Overhead as a period cost B Variable Costing treats Fixed Manufacturing Overhead as a period cost C Absorption Costing only considers variable costs to calculate net income D Variable Costing only considers variable costs to calculate net income
Which of the following is considered part of the product costs under absorption costing but not under variable costing? Group of answer choices Direct materials Selling expenses Variable overhead Fixed manufacturing overhead
Which of the following is a correct statement? O A. the fixed manufacturing cost is based on a per unit cost, when using Variable Costing O B. the fixed manufacturing cost is based on a per unit cost, when using Absorption Costing and a total cost, when using Variable Costing Oc the variable manufacturing cost is shown as a total cost in both Variable Costing and Absorption Costing O D. the fixed manufacturing cost is always shown as a total cost, when using Absorption Costing
The optimal quantity order to reduce the overall cost is usually stated as EOQ. why it is related to one time order? How carrying and ordering cost is related to each other?
The product costing method that includes fixed manufacturing cost in inventories costs is called Select one: Variable costing. O a. Ob. Direct costing. O c. Absorption costing. Od. Contribution margin. The strategy MOST likely to reduce the breakeven point would be to: Select one: Oa. Decrease the fixed costs and increase the contribution margin. Ob. Increase both the fixed costs and the contribution margin. on Increase the fixed costs and decrease the contribution margin. d. Decrease both the fixed costs and the contribution margin.
Give the general formula for a mixed cost. What does each term represent? Provide an example of a product or service with a mixed cost.
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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.
Under which costing system non manufacturing costs will not be included in calculating product costs? a. Absorption costing and Variable costing systems. b. Variable costing system only. C. Absorption costing system only. d. Activity based costing system only. e. None of the given answers
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.
Which of the following is NOT a feature of unit costing? Select the correct response: Average unit cost Multiple product Applicability Single product