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Exam 6: Variable Costing and Analysis

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Question 1

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Given the following data, calculate product cost per unit under absorption costing.

A) $8 per unit
B) $8.50 per unit
C) $10.25 per unit
D) $10.75 per unit
E) $12 per unit

F) None of the above
G) B) and C)

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Question 2

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Assuming fixed costs remain constant, and a company sells more units than it produces, then income under absorption costing is less than income under variable costing.

A) True
B) False

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Question 3

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What costs are treated as product costs under the absorption costing method?

Triton Industries reports the following information regarding its production cost: a. Compute product cost per unit under variable costing. b. Compute product cost per unit under absorption costing.

What are the benefits of using variable costing when striving to control costs? Are these benefits available under absorption costing?

Magenta Inc. reports the following information for the current year, which is its first year of operations: If the company's cost per unit of finished goods using absorption costing is $39.75, what is total variable overhead?

A variable costing income statement focuses attention on the relationship between costs and sales that is not evident from the absorption costing format.

Given the following data, total product cost per unit under variable costing is $10.75.

Jeter Corporation had net income of $212,000 based on variable costing. Beginning and ending inventories were 6,000 units and 10,000 units, respectively. Assume the fixed overhead per unit was $4 for both the beginning and ending inventory. What is net income under absorption costing?

Given Advanced Company's data, compute cost of finished goods in inventory under absorption costing.

Assuming fixed costs remain constant, and a company produces more units than it sells, then income under absorption costing is less than income under variable costing.

Under variable costing, the product unit cost consists of ________,direct materials, and variable overhead.

Milton Company reports the following information for the current year: If the company's cost per unit of finished goods using absorption costing is $18, what is total fixed overhead?

When the number of units produced exceeds the number of units sold, absorption costing defers some of the fixed costs incurred.

Lukin Corporation reports the following first year production cost information: a. Compute production cost per unit under variable costing. b. Compute production cost per unit under absorption costing. c. Determine the net income using variable costing. d. Determine the net income using absorption costing.

A company reports the following information for its first year of operations: If the company's cost per unit of finished goods using variable costing is $2,375, what is total variable overhead?

Which of the following statements is true?

State Industries has the following information for 20X1: There are no beginning inventories. Prepare an income statement for the year under absorption costing.

The absorption costing approach assigns all manufacturing costs to products.

Which of the following best describes costs assigned to the product under the absorption costing method? Direct labor (DL) Direct materials (DM) Variable selling and administrative (VSA) Variable manufacturing overhead (VOH) Fixed selling and administrative (FSA) Fixed manufacturing overhead (FOH)