At the end of the accounting period Bumsted Corporation reports operating

At the end of the accounting period bumsted

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102.At the end of the accounting period Bumsted Corporation reports operating income of $30,000 and the fixed overhead cost rate is $20 per unit. Under variable costing, if this company produces 100 more units of inventory, then operating income:a.will increase by $2,000b.will increase by $2,000 only if the 100 additional units of inventory are soldc.will not be affectedd.is indeterminableAnswer:cDifficulty:3Objective:3103.Companies have recently been able to reduce inventory levels because:104.Many companies have switched from absorption costing to variable costing for internal reporting: Answer:cDifficulty:2Objective:4Mr . Kareem Abozeed
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41105.Ways to “produce for inventory” that result in increasing operating income include:107.Under absorption costing, if a manager’s bonus is tied to operating income, then increasing inventory levels compared to last year would result in: a.increasing the manager’s bonusb.decreasing the manager’s bonusc.not affecting the manager’s bonusd.being unable to determine the manager’s bonus using only the above informationAnswer:aDifficulty:3Objective:4108.Under variable costing, if a manager’s bonus is tied to operating income, then increasing inventory levels compared to last year would result in: 112.Which of the following inventory costing methods shown below is MOST likely to cause undesirable incentives for managers to build up finished goods inventory?Mr . Kareem Abozeed
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  • Fall '16
  • taher refaat
  • Accounting, Difficulty, Kareem Abozeed

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