Exam 8: Absorption and Variable Costing, and Inventory Management

Inventory costs under variable costing include only direct materials, direct labor, and variable factory overhead.

On a segmented income statement, fixed costs are broken down into direct fixed costs and common fixed costs.

On a segmented income statement, fixed expenses are broken down into _____________ and ______________.

Simon Company sells 900 units of its deluxe product each year. The cost of setting up for one production run is $150; the cost of carrying one unit in inventory for a year is $3. Simon currently produces 100 deluxe units in one production run.