11 when there are no beginning or ending finished goods inventories a variable and 4306487

11 when there are no beginning or ending finished goods inventories a variable and 4306487

11) When there are no beginning or ending finished goods inventories, ________.

A) variable and absorption costing will result in different values for ending finished goods inventories

B) variable and absorption costing will result in the same operating profits

C) variable and absorption costing will result in different sales revenue

D) variable and absorption costing will result in different values for cost of goods sold

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

A) variable costing

B) direct costing

C) absorption costing

D) contribution costing

13) A variable costing income statement is used for ________.

A) filing income tax returns

B) external reporting purposes

C) determining the amount of gross profit

D) internal decision making purposes

14) When all of the units produced are sold, the operating income will be the same under both the costing methods. (Assume no beginning inventories.) Which of the following gives the correct reason for the above statement?

A) all costs incurred have been recorded as expenses

B) a portion of the fixed manufacturing overhead is still in the Finished Goods Inventory account

C) all selling and administrative expenses have been recorded as period costs

D) fixed manufacturing costs have not been considered while calculating the operating profits

15) When production is more than sales, the operating income will be higher under absorption costing than variable costing. Assume zero beginning inventories. Which of the following gives the correct reason for the above statement?

A) all costs incurred have been recorded as expenses

B) a portion of the fixed manufacturing overhead is still in the ending Finished Goods Inventory account

C) all selling and administrative expenses have been recorded as period costs

D) fixed manufacturing costs have not been considered while calculating the operating profits

16) When production is less than sales, the operating income will be lower under absorption costing than variable costing. Assume zero ending inventories. Which of the following gives the correct reason for the above statement?

A) all costs incurred have been recorded as expenses

B) a portion of the fixed manufacturing overhead is still in the ending Finished Goods Inventory account

C) the units in the beginning finished goods inventory have manufacturing fixed costs assigned to them

D) fixed manufacturing costs have not been considered while calculating the operating profits

17) Kaycom Inc. reports the following information:

Units produced

500

units

Units sold

500

units

Sale price

$110

per unit

Direct materials

$20

per unit

Direct labor

$15

per unit

Variable manufacturing overhead

$10

per unit

Fixed manufacturing overhead

$15,000

per year

Variable selling and administrative costs

$5

per unit

Fixed selling and administrative costs

$10,000

per year

What is the amount of unit product cost that will be considered for external reporting purposes?

A) $45

B) $65

C) $85

D) $75

18) Flexlux Inc. reports the following information:

Units produced

500

units

Units sold

500

units

Sale price

$110

per unit

Direct materials

$20

per unit

Direct labor

$15

per unit

Variable manufacturing overhead

$10

per unit

Fixed manufacturing overhead

$15,000

per year

Variable selling and administrative costs

$5

per unit

Fixed selling and administrative costs

$10,000

per year

What is the unit product cost using variable costing?

A) $50

B) $55

C) $45

D) $65

19) Medbam Inc. has collected the following data for November (there are no beginning inventories):

Units produced

500

units

Units sold

500

units

Sale price

$110

per unit

Direct materials

$20

per unit

Direct labor

$15

per unit

Variable manufacturing overhead

$10

per unit

Fixed manufacturing overhead

$15,000

per year

Variable selling and administrative costs

$5

per unit

Fixed selling and administrative costs

$10,000

per year

What is the operating income using absorption costing?

A) $6,000

B) $3,500

C) $5,000

D) $4,500

20) SailFind Inc. has collected the following data for November (there are no beginning inventories):

Units produced

500

units

Sale price

$110

per unit

Direct materials

$20

per unit

Direct labor

$15

per unit

Variable manufacturing overhead

$10

per unit

Fixed manufacturing overhead

$15,000

per year

Variable selling and administrative costs

$5

per unit

Fixed selling and administrative costs

$10,000

per year

What is the operating income using variable costing if 450 units are sold?

A) $2,000

B) $3,500

C) $3,000

D) $2,500

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