Quiz19a - Quiz Chapter 19 Solution 1 In an income statement...

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Page 1 Quiz – Chapter 19 - Solution 1. In an income statement prepared as an internal report using the variable costing method, variable selling and administrative expenses would: A) not be used. B) be treated the same as fixed selling and administrative expenses. C) be used in the computation of net operating income but not in the computation of the contribution margin. D) be used in the computation of the contribution margin. The answer is d. All variable costs and expenses are subtracted from Sales Revenue to produce the contribution margin. 2. If the number of units produced exceeds the number of units sold, then net operating income under absorption costing will: A) be equal to the net operating income under variable costing. B) be greater than net operating income under variable costing. C) be equal to the net operating income under variable costing plus total fixed manufacturing costs. D) be equal to the net operating income under variable costing less total fixed manufacturing costs. The answer is b. The amount by which the operating income reported under absorption costing exceeds the operating income reported under variable costing is given by the following formula. Fixed Factory Overhead Per Unit x Unsold Units
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Page 2 Use the following to answer questions 3-6: Janos Company, which has only one product, has provided the following data concerning its most recent month of operations: Selling price . ............................................ $111 Units in beginning inventory . .................. 300
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This note was uploaded on 10/02/2008 for the course MGMT 122 taught by Professor Saouma during the Spring '08 term at UCLA.

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Quiz19a - Quiz Chapter 19 Solution 1 In an income statement...

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