Which of the following differs from absorption costing?
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Show Variable Costing 1.Which of the following is not a type of absorption costing? a.direct costing b.actual costing c.normal costing d.none of the above 2.Variable costing is unacceptable for a.managerial accounting b.financial accounting c. transfer pricing d.reporting by product lines for internal purposes 3.A criticism of variable costing for managerial accounting purposes is that it a.is not acceptable for product line segmented reporting b.does not reflect cost-volume-profit relationships c.overstates inventories d.might encourage managers to emphasize the short term at the expense of the long term 4.The use of variable costing requires knowing a.the contribution margin and break-even point for each product b.the variable and fixed components of production cost c.controllable and non-controllable components of all costs d.the number of units of each product produced during the period 5.Advocates of variable costing for internal reporting purposes do not rely on which of the following points? a.the matching concept b.price-volume relationships c.absorption costing does not include selling and administrative expenses as part of inventoriable cost. d.production influences income under absorption costing 6.Calculating income under variable costing does not require knowing a.unit sales b.unit variable manufacturing costs c.selling price d.unit production 7.Inventoriable costs under absorption costing include a.both fixed and variable production costs b.only variable production costs c.all production costs plus variable selling and administrative costs d.all production costs plus all selling and administrative costs 8.Inventoriable costs under variable costing include a.both fixed and variable production costs b.only variable production costs c.all production costs plus variable selling and administrative costs d.all production costs plus all selling and administrative costs 9.Absorption costing and variable costing differ in that a.income is lower under variable costing b.variable costing treats selling costs as period costs c.variable costing treats all variable costs as product costs d.inventory cost is higher under absorption costing 10.Which method gives the lowest inventory cost per unit? a.Variable costing b.Absorption costing using normal capacity to set the standard fixed cost c.Absorption costing using practical capacity to set the standard fixed cost d.Actual absorption costing 11.Which costs are treated differently under absorption costing and variable costing? a.variable manufacturing costs b.fixed manufacturing costs c.variable selling and administrative expenses d.fixed selling and administrative expenses 12. ABC Company had 15,000 units in ending inventory. The total cost of those units under variable costing is a.less than it is under absorption costing b.the same as it is under absorption costing c.more than it is under absorption costing d.any of the above 13.Which variance cannot arise under variable costing? Which of the following differs between absorption costing and variable costing?The only difference between absorption costing and variable costing is in the treatment of fixed manufacturing overhead. Using absorption costing, fixed manufacturing overhead is reported as a product cost. Using variable costing, fixed manufacturing overhead is reported as a period cost.
What is the difference between absorption costing?Absorption costing includes all of the direct costs associated with manufacturing a product. Variable costing can exclude some direct fixed costs. Absorption costing entails allocating fixed overhead costs to all units produced for an accounting period.
What are basic differences between absorption costing and direct costing?The direct costing model takes all the fixed cost to the income statement immediately. The absorption costing model assigns the fixed cost to units produced during the period. The two costing systems can produce different periodic income numbers if production and sales volume fluctuate, i.e. differ from each other.
Which of the following is known as absorption costing?Absorption costing is also known as full costing since it includes all the costs associated with production. Variable costs are direct labour and material costs. Fixed costs include rent, security, and insurance expenses.
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