learning objective 21 2 1 the level of inventory on hand at the end of the year does 4306452

learning objective 21 2 1 the level of inventory on hand at the end of the year does 4306452

Learning Objective 21-2

1) The level of inventory on hand at the end of the year does not affect the amount of operating income calculated under variable costing and absorption costing.

2) In variable costing, the value of ending finished goods inventory includes fixed manufacturing overhead.

3) When there are no units in the beginning finished goods inventory and the units produced are more than the units sold, the operating income will be higher under absorption costing than variable costing.

4) When there are no units in the beginning finished goods inventory and the units produced are more than the units sold, the operating income will be higher under variable costing than absorption costing.

5) Under variable costing, the units in the beginning finished goods inventory contain manufacturing fixed costs.

6) When all the units produced are sold, the profit calculated under absorption costing is higher when compared to the profit calculated under variable costing.

7) In variable costing, all fixed manufacturing costs are expensed in the period incurred.

8) In its first year of business, Greenlam Inc. produced 600 units and sold 400 units. If Greenlam uses variable costing, ________.

A) its operating profit for the period will be higher than absorption costing

B) its operating profit for the period will be lower than absorption costing

C) its value of ending inventory reported in the balance sheet will be higher than absorption costing

D) its operating profit will be the same under absorption costing

9) In its first year of business, Greenlam Inc. produced and sold 600 units. If Greenlam uses variable costing, ________.

A) its operating profit for the period will be higher than absorption costing

B) its operating profit for the period will be lower than absorption costing

C) its value of ending inventory reported in the balance sheet will be higher than absorption costing

D) its operating profit will be the same under absorption costing

10) Greenlam Inc. started the year with 200 units in the Finished Goods Inventory account. It produced 600 units during the year and sold 800 units. If Greenlam uses variable costing:

A) its operating profit for the period will be higher than absorption costing.

B) its operating profit for the period will be lower than absorption costing.

C) its value of ending inventory reported in the balance sheet will be higher than absorption costing.

D) its operating profit will be the same under absorption costing.

Looking for a similar assignment? Get help from our qualified experts!

Order Now

Related Posts