Which of the following costing methods charges all manufacturing costs to its products?

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Question 1 Which of the following statements is correct? a. When production is not equal to sales, income under absorption costing differs from income under variable costing due to the difference in treatment of the fixed overhead cost under the two costing methods b. In absorption costing system, fixed overhead cost is treated as period cost. c. In variable costing system, fixed overhead cost is included as part of the cost of inventory d. In a variable costing income statement, sales revenue is typically higher than absorption costing income statement Question 2 Which of the following statements is true? a. Income under absorption costing is always greater than income under variable costing b. Depreciation expense is always a period cost c. Selling and administrative costs, whether variable or fixed, is always treated as period costs under both absorption and variable costing system d. Depreciation expense is always a product cost Question 3 If production is less than sales in unit, then absorption costing net income will generally be a. Less than expected b. Equal to variable costing net income c. Less than variable costing net income d. Greater than variable costing net income Question 4 If a firm uses variable costing a. It calculates an idle facility variation b. Its profit fluctuates with sales c. Its product cost per unit changes because of changes in the number of units produced d. Its product costs include variable selling and administrative costs Question 5 The inventory costing method that treats direct manufacturing costs and indirect manufacturing cost, both variable and fixed, as inventoriable cost is called a. Conversion costing b. Perpetual inventory c. Variable costing d. Absorption costing Question 6 Which of the following statements regarding absorption and variable costing is correct? a. Absorption costing results in higher income when finished goods inventory increases b. Variable manufacturing costs are lower under absorption costing c. Profits are always the same under the two costing methods d. Overhead costs are treated in the same manner under both variable and absorption costing methods. Question 7 Which of the following must be known about a production process to institute a variable costing system? a. Standard quantities and prices for all production inputs b. The direct and indirect costs related to production c. The variable and fixed components of manufacturing costs d. The capacity level or denominator level to be used in allocating fixed overhead costs Question 8 What costs are treated as product cost under variable costing a. All manufacturing costs b. Only variable production costs c. All direct costs only d. All variable costs Question 9 Which of the following costing methods is not acceptable for external reporting? a. Process costing b. Activity-based costing c. Absorption costing d. Variable costing Question 11 Income under absorption costing may differ from income under variable costing. The difference in income between the two costing methods is equal to the change of the quantity of all units a. Produced multiplied by the variable manufacturing cost per unit b. Sold multiplied by the selling price per unit c. Sold multiplied by the fixed factory overhead cost per unit d. In inventory multiplied by the fixed factory overhead cost per unit Question 12 Net income computed using absorption costing can be reconciled to net income computed using variable costing by computing the difference between a. The product cost per unit under the two costing methods b. The gross profit under absorption costing and contribution margin under variable costing c. The selling price under two costing method d. Inventoried fixed factory overhead costs in the beginning and ending finished goods inventories Question 13 Which of the following statements is correct? a. Unit variable costs change directly with the cost driver or activity level b. Gross margin and contribution margin are the same c. One inherent simplifying assumption in CVP analysis is productions equals sales d. Contribution margin is the excess of sales over variable costs, and this is the amount available for the recovery of fixed assets and generation of profit Question 14 The type of costing system that will provide the best information for CVP and Break-even analysis if inventories are expected to change is a. Job order costing b. Variable costing c. Process costing d. Absorption Costing Question 15 Result of income are the same in both absorption and variable costing methods when a. When variable overhead cost per unit are the same. b. When Sales exceeds production c. Production exceeds sales d. Production and sales are the same

Answered by ProfessorFog901 on coursehero.com

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