Question 1

Match the type of income statement to the costs it includes.
-Direct labor for units sold

Accepted Answer

A) Variable costing income statement 
B) Absorption costing income statement 
C) Both types of income statements 
A) Variable costing income statement 
B) Absorption costing income statement 
C) Both types of income statements

Question 2

Which of the following types of costs is a product cost for absorption costing but a period cost for variable costing?

Accepted Answer

A)  direct materials 
B)  direct labor 
C)  fixed factory overhead per unit sold 
D)  variable selling expense 
E)  total administrative expense 
A)  direct materials 
B)  direct labor 
C)  fixed factory overhead per unit sold 
D)  variable selling expense 
E)  total administrative expense

Question 3

The costs of not having a product available when demanded by a customer are called stockout costs.

Accepted Answer

A) True 
 B)False

Question 4

Match the type of income statement to the costs it includes.
-Fixed selling expense

Accepted Answer

A) Variable costing income statement 
B) Absorption costing income statement 
C) Both types of income statements 
A) Variable costing income statement 
B) Absorption costing income statement 
C) Both types of income statements

Question 5

Assume the following information for a product line:
  
-Refer to Figure 8-12. What is the contribution margin of the product line?

Accepted Answer

A)  $400,000 
B)  $525,000 
C)  $445,000 
D)  $515,000 
A)  $400,000 
B)  $525,000 
C)  $445,000 
D)  $515,000

Question 6

Grass Valley Mining mines three products. Gold ore sells for $1,000 per ton, variable costs are $400 per ton, and fixed mining costs are $250,000. Last year the segment margin was $(100,000). How many tons of gold ore did Grass Valley Mining sell last year?

Accepted Answer

A)  375 tons 
B)  1,000 tons 
C)  250 tons 
D)  200 tons 
A)  375 tons 
B)  1,000 tons 
C)  250 tons 
D)  200 tons

Question 7

If the number of units produced in a period is larger than the number of units sold in a period, absorption costing income will be higher than variable costing income.

Accepted Answer

A) True 
 B)False

Question 8

Match the type of income statement to the costs it includes.
-Fixed factory overhead for the period

Accepted Answer

A) Variable costing income statement 
B) Absorption costing income statement 
C) Both types of income statements 
A) Variable costing income statement 
B) Absorption costing income statement 
C) Both types of income statements

Question 9

Generally accepted accounting principles require ______________ for external reporting.

Accepted Answer

The answer of Generally accepted accounting principles require ______________ for...

Question 10

The following information pertains to Mayberry Corporation:
  
-Refer to Figure 8-4. What is the value of the ending inventory using the variable costing method?

Accepted Answer

A)  $240,000 
B)  $360,000 
C)  $350,000 
D)  $420,000 
A)  $240,000 
B)  $360,000 
C)  $350,000 
D)  $420,000

Question 11

You have just become the controller for Artisan Industries. Artisan produces three different products and upon review of their internal reports you notice that they have never prepared a segmented income statement. Explain to the vice president what a segmented income statement consists of and why it can be useful in decision making.

Accepted Answer

In a segmented income statement fixed ex

Question 12

Laird Company uses 405 units of a part each year. The cost of placing one order is $5; the cost of carrying one unit in inventory for a year is $2. Laird currently orders 81 units at a time.

Accepted Answer

Laird Company uses 405 units o

Question 13

JIT responds to the problems traditionally solved by carrying inventories by

Accepted Answer

A)  ensuring that sufficient inventory is on hand to prevent stockouts. 
B)  purchasing extra materials when price discounts are offered. 
C)  negotiating long-term contracts with supplier to lock in low prices. 
D)  selecting an inventory level that minimizes the total of ordering and carrying costs. 
E)  choosing a wide number of suppliers to increase the chance of receiving quantity discounts. 
A)  ensuring that sufficient inventory is on hand to prevent stockouts. 
B)  purchasing extra materials when price discounts are offered. 
C)  negotiating long-term contracts with supplier to lock in low prices. 
D)  selecting an inventory level that minimizes the total of ordering and carrying costs. 
E)  choosing a wide number of suppliers to increase the chance of receiving quantity discounts.

Question 14

Carrying costs

Accepted Answer

A) the costs of not having a product available when demanded by a customer 
B) the costs of carrying inventory 
C) approach that maintains goods should be pulled through the system by present demand 
D) the number of units in the order quantity that minimizes the total cost 
E) the costs of placing and receiving an order 
A) the costs of not having a product available when demanded by a customer 
B) the costs of carrying inventory 
C) approach that maintains goods should be pulled through the system by present demand 
D) the number of units in the order quantity that minimizes the total cost 
E) the costs of placing and receiving an order

Question 15

Nauman Company has the following information pertaining to its two divisions for last year:
   Common expenses are $24,000 for the year.
-Refer to Figure 8-10. What is the income for Nauman Company?

Accepted Answer

A)  $65,000 
B)  $325,000 
C)  $300,000 
D)  $41,000 
A)  $65,000 
B)  $325,000 
C)  $300,000 
D)  $41,000

Question 16

JIT relies on a push system to control finished good inventory.

Accepted Answer

A) True 
 B)False

Question 17

The inventory cost that can include processing costs, cost of insurance for shipping, and unloading is called

Accepted Answer

A)  ordering cost. 
B)  carrying cost. 
C)  stockout cost. 
D)  setup cost. 
E)  storing cost. 
A)  ordering cost. 
B)  carrying cost. 
C)  stockout cost. 
D)  setup cost. 
E)  storing cost.

Question 18

Mario Co. produces three products: LMC, DMC, KPC. For the coming year they expect to produce 160,000 units. Of these, 65,000 will be LMC, 40,000 will be DMC and 55,000 will be KPC. The following information was provided for the coming year:
  Common fixed overhead is $984,000 and fixed selling and administrative expenses for Mario Co. is $881,000 per year.
Required:
A. Calculate the unit variable cost under variable costing.
B. Calculate the unit variable product cost.
C. Prepare a segmented variable-costing income statement for next year.
D. Should Mario Co. keep all product lines?

Accepted Answer

A.
 @#IMG-DLM& B.
 @#IMG-DLM& C.
 @#IMG-DLM& D. The company

Question 19

When production is less than sales volume, income under absorption costing will be ____ income using variable costing procedures.

Accepted Answer

A)  greater than 
B)  less than 
C)  equal to 
D)  randomly different than 
A)  greater than 
B)  less than 
C)  equal to 
D)  randomly different than

Question 20

Economic order quantity

Accepted Answer

A) the costs of not having a product available when demanded by a customer 
B) the costs of carrying inventory 
C) approach that maintains goods should be pulled through the system by present demand 
D) the number of units in the order quantity that minimizes the total cost 
E) the costs of placing and receiving an order 
A) the costs of not having a product available when demanded by a customer 
B) the costs of carrying inventory 
C) approach that maintains goods should be pulled through the system by present demand 
D) the number of units in the order quantity that minimizes the total cost 
E) the costs of placing and receiving an order

Match the type of income statement to the costs it includes. -Direct labor for units sold

Which of the following types of costs is a product cost for absorption costing but a period cost for variable costing?

The costs of not having a product available when demanded by a customer are called stockout costs.

Match the type of income statement to the costs it includes. -Fixed selling expense

Assume the following information for a product line: -Refer to Figure 8-12. What is the contribution margin of the product line?

Grass Valley Mining mines three products. Gold ore sells for $1,000 per ton, variable costs are $400 per ton, and fixed mining costs are $250,000. Last year the segment margin was $(100,000). How many tons of gold ore did Grass Valley Mining sell last year?

If the number of units produced in a period is larger than the number of units sold in a period, absorption costing income will be higher than variable costing income.

Match the type of income statement to the costs it includes. -Fixed factory overhead for the period

Generally accepted accounting principles require ______________ for external reporting.

The following information pertains to Mayberry Corporation: -Refer to Figure 8-4. What is the value of the ending inventory using the variable costing method?

Laird Company uses 405 units of a part each year. The cost of placing one order is $5; the cost of carrying one unit in inventory for a year is $2. Laird currently orders 81 units at a time.

JIT responds to the problems traditionally solved by carrying inventories by

Carrying costs

Nauman Company has the following information pertaining to its two divisions for last year: Common expenses are $24,000 for the year. -Refer to Figure 8-10. What is the income for Nauman Company?

JIT relies on a push system to control finished good inventory.

The inventory cost that can include processing costs, cost of insurance for shipping, and unloading is called

When production is less than sales volume, income under absorption costing will be ____ income using variable costing procedures.

Economic order quantity

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 8: Absorption and Variable Costing, and Inventory Management

Match the type of income statement to the costs it includes. -Direct labor for units sold

Which of the following types of costs is a product cost for absorption costing but a period cost for variable costing?

The costs of not having a product available when demanded by a customer are called stockout costs.

Match the type of income statement to the costs it includes. -Fixed selling expense

Assume the following information for a product line: -Refer to Figure 8-12. What is the contribution margin of the product line?

Grass Valley Mining mines three products. Gold ore sells for $1,000 per ton, variable costs are $400 per ton, and fixed mining costs are $250,000. Last year the segment margin was $(100,000). How many tons of gold ore did Grass Valley Mining sell last year?

If the number of units produced in a period is larger than the number of units sold in a period, absorption costing income will be higher than variable costing income.

Match the type of income statement to the costs it includes. -Fixed factory overhead for the period

Generally accepted accounting principles require ______________ for external reporting.

The following information pertains to Mayberry Corporation: -Refer to Figure 8-4. What is the value of the ending inventory using the variable costing method?

Laird Company uses 405 units of a part each year. The cost of placing one order is $5; the cost of carrying one unit in inventory for a year is $2. Laird currently orders 81 units at a time.

JIT responds to the problems traditionally solved by carrying inventories by

Carrying costs

Nauman Company has the following information pertaining to its two divisions for last year: Common expenses are $24,000 for the year. -Refer to Figure 8-10. What is the income for Nauman Company?

JIT relies on a push system to control finished good inventory.

The inventory cost that can include processing costs, cost of insurance for shipping, and unloading is called

When production is less than sales volume, income under absorption costing will be ____ income using variable costing procedures.

Economic order quantity

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters