ACCT 212 Read & Interact Wild & Shaw Chapter 6 Variable Costing solutions complete answers

ACCT 212 Read & Interact Wild & Shaw Chapter 6 Variable Costing solutions complete answers 

 

The costing system which is considered acceptable for external reporting under U.S. GAAP is

 

Over the  _ run, selling prices must cover both fixed and variable costs.

 

When using absorption costing, all of the following are included in product costs (select all answers that are applicable):

 

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?

 

Regardless of whether variable costing or absorption costing is used, if quantity produced differs from quantity sold, income will be   (similar, different, indeterminable).

 

Managers should accept special orders if the special-order price

 

When units produced are less than units sold, net income computed under variable costing will be   (greater, less) than net income computed under absorption.

 

The variable costing method includes all of the following costs (select all that apply):

 

Cost information from   (neither, both) costing method(s) is helpful to management in setting prices.

 

Differences in income between variable costing and absorption costing is due to

 

True or false: When units produced are less than units sold, net income under absorption costing will be less than net income computed under variable costing.

 

The percent by which a product's unit selling price exceeds its total unit variable cost is the:

 

Trudy Company is using variable costing. Which of the following items would be included in Trudy's product costs? Select all that are correct. (Check all that apply).

 

The contribution margin ratio is interpreted as the percent of:

 

The variable costing method includes all of the following as part of the product cost (select all that apply):

 

Under the       (absorption,variable) costing method only total costs which vary with changes in production volume are assigned to products.

 

Makum Company's is using variable costing. Which of the items below would you see on Makum's income statement?

 

The costing system which is considered acceptable for reporting under U.S. GAAP is

 

Mandolin produced 70,000 units and sold 50,000 units. Their unit selling price is $20 and they have variable unit production costs of $10, variable selling expenses of $3 and fixed overhead of $10,000. Compute Mandolin's net income under variable costing.

 

Landow Company uses variable costing for internal purposes and wants to restate income to that of absorption costing for external reporting purposes. Landow's income under variable costing is $630,000. Fixed production cost in ending inventory is $120,000 and $85,000 in beginning inventory. What is Landow's income under absorption costing?

 

A        format income statement reports variable costs separately from fixed costs.

 

Loudon 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: 

 

In special order decisions, management should ensure that special order prices exceed        cost.

 

An income statement which shows the excess of sales over variable costs is referred to as a               income statement. 

 

       (absorption, variable) costing is acceptable for external reporting under U.S. GAAP. 

 

A system of rewarding managers by linking bonuses to income computed under absorption costing may result in: 

 

When units produced are greater than units sold variable costing net income will be        (less, greater) than net income calculated under absorption costing. 

 

Makum Company's is using a traditional, absorption, costing. Which of the items below would you see on Makum's income statement? 

 

Managers should be held responsible for their 

 

Sales minus variable costs is called              .

 

Service firms should focus on _____ costs in managerial decisions. 

 

When using variable costing, costs are grouped by each of the following (select all answers that are applicable):

 

A contribution margin income statement shows:

 

Commonwealth Company has the following unit costs: direct materials $2, direct labor $4, variable overhead $1, fixed overhead $3. Under the absorption costing method, what is the total unit cost?

 

Contribution margin is the excess of

 

Galen Company income under variable costing is $1,050,000. Fixed production costs in ending inventory are $300,000 and $250,000 in beginning inventory. What is Galen Company's income under absorption costing?

 

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.

 

Production planning is important because producing too much can lead to        (excess, insufficient) inventory.

 

Since service firms do not produce inventory, they should focus primarily on

 

Trudy Company is using variable costing. Which of the following items would be shown on Trudy's income statement? Select all that are correct.

 

When deciding whether or not to accept a special order, management should consider whether the special order price exceeds

 

An effective cost control system will hold managers responsible only for their        costs.

 

An income statement which separately reports variable costs from fixed costs is known as a(n)

 

Under absorption costing, fixed overhead is allocated to products sold, so when production is greater than units sold, net income will be        (greater, less) than income calculated under variable costing.

 

When units produced are greater than units sold under variable costing, fixed overhead is an expense and results in        (lower, higher) net income than under absorption costing.

 

When using absorption costing when production is greater than sales, a portion of fixed overhead is allocated to: