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A.the variable and fixed components of all costs related to productionB. the controllable and non-controllable components of all costs related to productionC. standard production rates and times for all elements of productionD. contribution margin and break-even point for all goods in production143. Why is variable costing notin accordance with generally accepted accounting principles? A.Fixed manufacturing costs are treated as period costs under variable costing.B. Variable costing procedures are not well known in industry.C. Net earnings are always overstated when using variable costing procedures.D. Variable costing ignores the concept of lower of cost or market when valuing inventory.
144. Which of the following is an argument againstthe use of direct (variable) costing? A. Absorption costing overstates the balance sheet value of inventories.B. Variable factory overhead is a period cost.C. Fixed manufacturing overhead is difficult to allocate properly.D.Fixed manufacturing overhead is necessary for the production of a product.145. Which of the following statements is true for a firm that uses variable costing? A. The cost of a unit of product changes because of changes in the number of units manufactured.B.Profits fluctuate with sales.C. An idle facility variation is calculated.D. None of the above.146. An income statement is prepared as an internal report. Under which of the following methods would the term contribution margin appear?Absorption costingVariable costingA. no noB.no yesC. yes noD. yes yes147. In an income statement prepared as an internal report using the variable costing method, fixed manufacturing overhead would A. not be used.B.be used in the computation of operating income but not in the computation of the contribution margin.C. be used in the computation of the contribution margin.D. be treated the same as variable manufacturing overhead.148. Variable costing has an advantage over absorption costing for which of the following purposes? A. analysis of profitability of products, territories, and other segments of a businessB. determining the CVP relationship among the major factors of selling price, sales mix, and sales volumeC. minimizing the effects of inventory changes on net incomeD.all of the above73| P a g e
149. In the variable costing income statement, which line separates the variable and fixed costs? A. selling expensesB. general and administrative expenseC. product contribution marginD.total contribution margin150. A firm presently has total sales of $100,000. If its sales rise, its A.net income based on variable costing will go up more than its net income based on absorption costing.B. net income based on absorption costing will go up more than its net income based on variable costing.C. fixed costs will also rise.