Under the ___ costing, method, direct materials, direct labor and factory overhead are assigned to products Show
Under the ___ costing method only total costs which vary with changes in production volume are assigned to products The key difference between absorption and variable costing is ____ overhead Absorption costing includes all of the following costs except The main difference between absorption and variable costing is their treatment of Trudy Company is using variable costing. Which of the following items would be shown on Trudy's income statement? Select all that are correct variable expenses Contribution margin is the excess of Managers should be held responsible for their Markum company's is using a traditional, absorption, costing. Which of the items below would you see on Marcum's income statement? Gross Margin Net Income Cost of Goods Sold Service firms should focus on ____ costs in managerial decisions To restate variable costing income to absorption costing income, add fixed production cost in ____ inventory to variable costing income. When using variable costing, costs are grouped by each of the following variable fixed production When units produced are greater than units sold variable costing net income will be ______ than net income calculated under absorption costing Ludon Company has the following unit costs: direct materials $6, direct labor $3, variable overhead $2, fixed overhead $1. Under absorption costing, total unit cost is: A ____ format income statement reports variable costs separately from fixed costs Under absorption costing, expenses are grouped according to ______ Production planning is important because too much can lead to _____ inventory Hamilton Company has decided to use variable costing and has identified the following costs: direct materials $5, direct labor $10, variable overhead $3, fixed overhead $2. What is Hamilton Company's total unit cost? Which costing method can be helpful to management in setting prices because it reflects full costs that sales must exceed for the company to be profitable If management incentives are tied to income under absorption costing, which of the following may occur increased storage costs increased financing costs possible obsolescence When using absorption costing when production is greater than sales, a portion of fixed overhead is allocated to _____ costing is acceptable for external reporting under U.S. GAAP. When deciding whether or not to accept a special order, management should consider whether the special order price exceeds An income statement which shows the excess of sales over variable costs is referred to as a _____ _____ income statement Variable costing is normally used for When units produced equals units sold, income under absorption costing will be ____ net income under variable costing When units produced are less than units sold, net income computed under variable costing will be _____ than net income computed under absorption Naples company produced 650,000 units and sold 500,000 units. Their unit selling price is $10. Cost of goods sold is $6 per unit. Fixed selling expenses are $10,000 and variable selling and administrative expenses are $3 per unit. Compute Naple's net income under absorption costing. If management incentives are tied to income under absorption costing, which of the following may occur possible inventory obsolecence Brother company uses variable costing. Their direct materials are $8, direct labor is $6 and total overhead is $5 of which $3 is variable. What is Brother Company's total unit cost? Using absorption costing is _____ in assisting managers in controlling costs. Handy Company sold 25,000 units and has a sales price of $50 per unit. Their variable unit cost of $15. What is Handy's contribution margin per unit A special order should be accepted if incremental costs are ____ incremental revenue Regardless of whether variable costing or absorption costing is used, if quantity produced differs from quantity sold, income will be ______ Galen company income under variable costing is $1,050,000. Fixed production cost in ending inventory is $300,000 and $250,000 in beginning inventory. What is Galen Company's income under absorption costing?  Variable Costing 1.Which of the following is not a type of absorption costing? a.direct costing b.actual costing c.normal costing d.none of the above 2.Variable costing is unacceptable for a.managerial accounting b.financial accounting c. transfer pricing d.reporting by product lines for internal purposes 3.A criticism of variable costing for managerial accounting purposes is that it a.is not acceptable for product line segmented reporting b.does not reflect cost-volume-profit relationships c.overstates inventories d.might encourage managers to emphasize the short term at the expense of the long term 4.The use of variable costing requires knowing a.the contribution margin and break-even point for each product b.the variable and fixed components of production cost c.controllable and non-controllable components of all costs d.the number of units of each product produced during the period 5.Advocates of variable costing for internal reporting purposes do not rely on which of the following points? a.the matching concept b.price-volume relationships c.absorption costing does not include selling and administrative expenses as part of inventoriable cost. d.production influences income under absorption costing 6.Calculating income under variable costing does not require knowing a.unit sales b.unit variable manufacturing costs c.selling price d.unit production 7.Inventoriable costs under absorption costing include a.both fixed and variable production costs b.only variable production costs c.all production costs plus variable selling and administrative costs d.all production costs plus all selling and administrative costs 8.Inventoriable costs under variable costing include a.both fixed and variable production costs b.only variable production costs c.all production costs plus variable selling and administrative costs d.all production costs plus all selling and administrative costs 9.Absorption costing and variable costing differ in that a.income is lower under variable costing b.variable costing treats selling costs as period costs c.variable costing treats all variable costs as product costs d.inventory cost is higher under absorption costing 10.Which method gives the lowest inventory cost per unit? a.Variable costing b.Absorption costing using normal capacity to set the standard fixed cost c.Absorption costing using practical capacity to set the standard fixed cost d.Actual absorption costing 11.Which costs are treated differently under absorption costing and variable costing? a.variable manufacturing costs b.fixed manufacturing costs c.variable selling and administrative expenses d.fixed selling and administrative expenses 12. ABC Company had 15,000 units in ending inventory. The total cost of those units under variable costing is a.less than it is under absorption costing b.the same as it is under absorption costing c.more than it is under absorption costing d.any of the above 13.Which variance cannot arise under variable costing? What is the basic difference between absorption costing and variable costing?Absorption costing entails allocating fixed overhead costs to all units produced for an accounting period. Variable costing includes all of the variable direct costs in COGS but excludes direct, fixed overhead costs.
What is the only difference between variable and absorption costing quizlet?Terms in this set (5) (The difference between variable and absorption costing is the treatment of fixed manufacturing overhead. All fixed manufacturing overhead is expensed during the period using variable resulting in lower operating income.
Why is there a difference between absorption and variable costing?Absorption costing differs from variable costing because it allocates fixed overhead costs to each unit of a product produced in the period. Absorption costing allocates fixed overhead costs to a product whether or not it was sold in the period.
What is the difference between operating incomes under absorption costing and variable costing quizlet?Under absorption costing, fixed manufacturing overhead is treated as a product cost and hence is an asset until products are sold. Under variable costing, fixed manufacturing overhead is treated as a period cost and is immediately expensed on the income statement.
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What is the basic difference between absorption costing and variable costing quizlet?
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