Study_questions_-_Ch._7

Study_questions_-_Ch._7 - Study questions - Ch. 7 Student:...

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Study questions - Ch. 7 Student: ___________________________________________________________________________ 1. How would the following costs be classified (product or period) under variable costing at a retail clothing store? A. Item A B. Item B C. Item C D. Item D 2. The principal difference between variable costing and absorption costing centers on: A. whether variable manufacturing costs should be included as product costs. B. whether fixed manufacturing costs should be included as product costs. C. whether fixed manufacturing costs and fixed selling and administrative costs should be included as product costs. D. none of these. 3. Which of the following costs at a manufacturing company would be treated as a product cost under the variable costing method? A. direct material cost B. property taxes on the factory building C. sales manager's salary D. all of the above 1
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4. Assuming that direct labor is a variable cost, the primary difference between the absorption and variable costing is that: A. variable costing treats only direct materials and direct labor as product cost while absorption costing treats direct materials, direct labor, and the variable portion of manufacturing overhead as product costs. B. variable costing treats direct materials, direct labor, the variable portion of manufacturing overhead, and an allocated portion of fixed manufacturing overhead as product costs while absorption costing treats only direct materials, direct labor, and the variable portion of manufacturing overhead as product costs. C. variable costing treats only direct materials, direct labor, the variable portion of manufacturing overhead, and the variable portion of selling and administrative expenses as product cost while absorption costing treats direct materials, direct labor, the variable portion of manufacturing overhead, and an allocated portion of fixed manufacturing overhead as product costs. D. variable costing treats only direct materials, direct labor, and the variable portion of manufacturing overhead
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Study_questions_-_Ch._7 - Study questions - Ch. 7 Student:...

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