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1. In the variable costing income statement, deduction of variable selling and administrative expenses from manufacturing margin yields: a. differential margin b. contribution margin c. gross profit d. marginal expenses 2. The amount of income under absorption costing will equal the amount of income under variable costing when units manufactured: a. exceed units sold b. equal units sold c. are less than units sold d. are equal to or greater than units sold 3. The amount of income under absorption costing will be less than the amount of income under variable costing when units manufactured: a. exceed units sold b. equal units sold c. are less than units sold d. are equal to or greater than units sold 4. Which of the following statements is correct using the direct costing concept? a. All manufacturing costs are included in the calculation of cost of goods manufactured. b. Only fixed costs are included in the calculation of cost of goods manufactured while variable costs are considered period costs. c. Only variable manufacturing costs are included in the calculation of cost of goods manufactured while fixed costs are considered period costs. d. All manufacturing costs are considered period costs. 5. The amount of income under absorption costing will be more than the amount of income under variable costing when units manufactured: a. exceed units sold b. equal units sold c. are less than units sold d. are equal to or greater than units sold 6. The level of inventory of a manufactured product has increased by 7,000 units during a period. The following data are also available: Variable Fixed Unit manufacturing costs of the period $12.00 $6.00 Unit operating expenses of the period 4.00 1.50 What would be the effect on income from operations if absorption costing is used rather than variable costing? a. $42,000 decrease b. $42,000 increase c. $52,500 increase d. $52,500 decrease 7. The level of inventory of a manufactured product has increased by 8,000 units during a period. The following data are also available: Variable Fixed Unit manufacturing costs of the period $24.00 $10.00 Unit operating expenses of the period 8.00 3.00 What would be the effect on income from operations if variable costing is used rather than absorption costing? a. $80,000 decrease b. $80,000 increase c. $104,000 decrease d. $104,000 increase 0000000000000000000000000000000000000000000000000000000000000000000 8. S&P Enterprises sold 10,000 units of inventory during a given period. The level of inventory of a manufactured product remained unchanged. The manufacturing costs were as follows: Variable Fixed Unit manufacturing costs of the period $11.00 $7.00 Unit operating expenses of the period 3.00 2.50 Which of the following statements is true?... View Full Document

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