Ch. 5 Learn Smart.docx - Ch.5 LearnSmart A part or activity within an organization about which managers would like cost revenue or profit data is called

Ch. 5 Learn Smart.docx - Ch.5 LearnSmart A part or activity...

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Ch.5 LearnSmart A part or activity within an organization about which managers would like cost, revenue or profit data is called a(n) segment . -Key differences between variable and absorption costing include: how cost classifications are defined, how fixed overhead is treated, & whether or not contribution margin is reported Manufacturing cost per unit of a product under variable costing are: direct materials, direct labor, and variable overhead *Which of the following statement is correct regarding segmented reported? Traceable fixed costs are charged to segments, but common fixed costs are not . *When calculating the segment margin, both traceable and common fixed costs are charged to the segment. False In segmented reporting, what are the two kinds of fixed costs? Traceable and common Direct costing or marginal costing are other terms for variable costing. Product costs under absorption costing are: direct labor, variable manufacturing overhead, fixed manufacturing overhead, direct materials Contrast the way fixed manufacturing overhead costs are treated in absorption costing versus variable costing. Absorption costing: fixed manufacturing overhead is treated as part of the per unit product cost and expensed as units are sold. Variable costing: fixed manufacturing overhead is treated as a period cost and expensed in full each period The segment margin equals the segment's contribution margin less the segment's traceable fixed costs. When a segment is eliminated, a: traceable fixed cost will disappear & common fixed cost will remain unchanged -If a segment is eliminated, common fixed costs that are not traced to the segment will. Under variable costing the cost of a unit of inventory does not contain: fixed manufacturing overhead Absorption costing is: used by most companies for both internal and external reports & required by GAAP and IFRS
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