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

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

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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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 changes
Which of the following statements about activity-based costing (ABC) is false? Group of answer choices In activity-based costing, cost drivers are what cause costs to be incurred. Activity-based costing is more likely to result in major differences from traditional costing systems if the firm manufactures only one product rather than multiple products. Activity-based costing is useful for allocating marketing and distribution costs. Activity-based costing differs from traditional costing systems in that it allocates costs according to the rates at which a product consumes different activities.
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.
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
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The following statements have been made in relation to activity-based costing: 1. A cost driver is a factor which causes a change in the cost of an activity. 2. Traditional absorption costing tends to underestimate overhead costs for high-volume products. Which of the above statements is/are true? O A. 1 only O B. 2 only OC. Neither 1 nor 2 O D. Both 1 and 2
Which of the following is most likely to be true of the manufacturing overhead costs assigned to a product with relatively low volume and high complexity? O a. An ABC system will assign the same manufacturing overhead costs to the product as a volume- based system. O b. Avolume-based system will assign more manufacturing overhead costs to the product than an ABC system. O c. An ABC system will assign more manufacturing overhead costs to the product than a volume-based system. O d. An ABC system will assign manufacturing overhead costs to the product, while a volume-based system will not. e to search W 11:35 A D A dx ENG 22-05-2021 hp 141 brt se delete home end 96 - backspace num ask lock T 7V 8A 94 home Dg up K enter 5 0 pause ↑ shift 11 end alt ctrl SUt
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.
Disadvantages of activity-based costing include which of the following? a. It is not acceptable under GAAP for external reporting. b. It can be costly to implement. c. It can be used in activity-based management. d. Both a. and b.
Which of the following is NOT a feature of unit costing? Select the correct response: Average unit cost Multiple product Applicability Single product
The contribution margin approach helps managers in short-term decision making because it A. reports costs and revenues at present value B. reports only mixed costs C. treats fixed manufacturing overhead as product costs D. isolates costs by behavior