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Exam 8: Absorption and Variable Costing

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Question 21

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All of the following are expensed under variable costing except:

A) variable manufacturing overhead.
B) fixed manufacturing overhead.
C) variable selling and administrative costs.
D) fixed selling and administrative costs.
E) items "C" and "D" abovE.

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Question 22

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Which of the following situations would cause variable-costing income to be higher than absorption-costing income?

A) Units sold equaled 39,000 and units produced equaled 42,000.
B) Units sold and units produced were both 42,000.
C) Units sold equaled 55,000 and units produced equaled 49,000.
D) Sales prices decreased by $7 per unit during the accounting perioD.
E) Selling expenses increased by 10% during the accounting period.

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Question 23

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The gross margin that the company would disclose on an absorption-costing income statement is:

Income reported under absorption costing and variable costing is:

The gross margin that the company would disclose on an absorption-costing income statement is:

Absorption costing is required for tax purposes.

All of the following costs are inventoried under absorption costing except:

Which of the following costs would be treated differently under absorption costing and variable costing?

Consider the following statements about absorption costing and variable costing: I.Variable costing is consistent with contribution reporting and cost-volume-profit analysis. II.Variable costing must be used for external financial reporting. III.A number of companies use both absorption costing and variable costing. Which of the above statements is (are) true?

Consider the following statements about absorption- and variable-costing income: I.Yearly income reported under absorption costing will differ from income reported under variable costing if production and sales volumes differ. II.In the long-run,total income reported under absorption costing will often be close to that reported under variable costing. III.Differences in income under absorption and variable costing can often be reconciled by multiplying the change in inventory (in units) by the variable manufacturing overhead cost per unit. Which of the above statements is (are) true?

The underlying difference between absorption costing and variable costing lies in the treatment of:

Chino began business at the start of the current year.The company planned to produce 25,000 units,and actual production conformed to expectations.Sales totaled 22,000 units at $30 each.Costs incurred were: If there were no variances,the company's absorption-costing income would be:

Delaware has computed the following unit costs for the year just ended: Which of the following choices correctly depicts the per-unit cost of inventory under variable costing and absorption costing?

Springstein began business at the start of the current year.The company planned to produce 40,000 units,and actual production conformed to expectations.Sales totaled 37,000 units at $42 each.Costs incurred were: If there were no variances,the company's variable-costing income would be:

For external-reporting purposes,generally accepted accounting principles require that net income be based on variable costing.

Indiana's per-unit inventoriable cost under absorption costing is:

Garcia's inventory increased during the year.On the basis of this information,income reported under absorption costing:

Springer began business at the start of the current year.The company planned to produce 40,000 units,and actual production conformed to expectations.Sales totaled 37,000 units at $42 each.Costs incurred were: If there were no variances,the company's absorption-costing income would be:

When units sold exceed units produced,absorption-costing income will be lower than variable-costing income.

Under throughput costing,the cost of a unit typically includes: