Under absorption costing fixed factory overhead costs

7. Under absorption costing, fixed factory overhead costs:
a. Are deferred in inventory when production exceeds sales.
b. Are always treated as period costs.
c. Are released from inventory when production exceeds sales.
d. None of these.
Ans: a. Are deferred in inventory when production exceeds
sales.
8. WB company computes net income under both the absorption costing
approach and the variable costing approach. For a given year, the
absorption costing net income was greater than the variable costing net
income. This fact suggest that:

9. Net income computed using variable costing would exceed net income
computed using absorption costing if:
10. When sales are constant, but the production level fluctuates, net
income determined by absorption costing method will:
11. Manga Inc. Manufactured 700 units last year. The ending inventory
consisted of 100 units. There was no beginning inventory. Variable
manufacturing costs were ₱6.00 per unit and fixed manufacturing costs
were ₱2.00 per unit. What would be the change in the peso amount of
ending inventory if variable costing was used instead of absorption
costing?
a. ₱800 decrease c. ₱0
b. ₱200 decrease d. ₱200 increase
Ans: b. ₱200 decrease