1: When using absorption costing, a company may be able to show a profit even if it is operating below the breakeven point. S2: Variable costing is more compatible with cost-volume-profit analysis than is absorption costing.   a. both are true b. both are false c. S1 is true d. S2 is true

Q: Operating profit is affected by changes in production under both the variable costing and absorption…

A: Operating profit is profit earned by the company from its primary or core purpose of the business.…

Q: What is the difference between absorption costing and variable costing? 2. Distinguish between…

A: Cost accounting:  It is a part of managerial accounting  and is used to record  total cost of…

Q: A company observed a decrease in the cost per unit All other things being equal, which of the…

A: SOLUTION- 1-You can reduce the unit cost of products by lowering your overhead cost per item. 2- By…

Q: Which of the following is true of a company that uses absorption costing? Multiple Choice   Net…

A: Absorption costing: Under the absorption costing method, manufacturing costs such as direct material…

Q: TRUE OR FALSE When absorption costing is used, management may be tempted to overproduce in each…

A: Under the absorption costing method, fixed overhead is considered as a product cost which is…

Q: o decide whether to accept or reject special order, the manager should ensure that the order is…

A: Solution: Special order is the order which is in addition to normal sales to customers. The…

Q: Each of a company's two product lines has a different contribution margin ratio. If the company's…

A: The contribution margin decides which product gives more profits to the company. The contribution is…

Q: When units produced exceeds units sold, a. net income under absorption costing is higher than net…

A: If units produced > units sold There will be ending inventory. Some part of the fixed factory…

Q: The production manager wants to achieve real and permanently decrease in the unit cost of the…

A: A planned constructive solution to reducing spending is cost reduction. Cost reduction is described…

Q: On a CVP graph for a profitable company, the total revenue (sales) line will be steeper than the…

A: Cost volume profit analysis: It can be defined as the technique of accounting that is used by the…

Q: Consider the following statements about absorption costing and variable costing: Variable costing…

A: Absorption costing and variable costing are managerial accounting and financial reporting cost…

Q: A company observed a decrease in the cost per unit. All other things being equal, which of the…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: In target​ costing, prices determine costs rather than vice​ versa." Explain.       Question content…

A: Target costing involves the calculation of an allowable product cost to earn a predetermined amount…

Q: Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs…

A: Cost volume profit analysis is also known as CVP analysis. It shows how profits of the organisation…

Q: In a multi-product company, as the mix of the products being sold changes, the overall contribution…

A: Overall contribution margin is the mix of individual contribution margin with the weights of their…

Q: When company reduced its inventories to zero, then   • Variable costing income > Absorption costing…

A: Variable cost means the cost which vary with the level of output where the fixed cost means the cost…

Q: S1: If production equals sales for the period, absorption costing and variable costing will produce…

A: Solution: S1: If production equals sales for the period, absorption costing and variable costing…

Q: If Mazoon Company sells unit outputs below the breakeven point O a. there will be a loss b. total…

A: break even point is a situation where the company will be in a stage of no profit and no loss. Every…

Q: Which of the following occurs if a company experiences a decrease in its fixed costs? Select one: O…

A: Contribution margin = Selling price - variable cost Break even point = Fixed cost / Contribution…

Q: Break-even analysis is concerned with determining a point at which the company can minimize total…

A: Break-even point is the point reached by the company where the revenues and costs of the firm are in…

Q: When comparing absorption costing with variable costing, which of the following statements is not…

A: Absorption costing is that method of costing, in which all total costs (fixed and variable) are…

Q: When company reduced its inventories to zero, then   a) Variable costing income > Absorption costing…

A: The difference between absorption costing income and variable costing income arises due to the…

Q: Is there any way to show high net operating income without increasing sales under the absorption…

A: A method of costing that involves consideration of all the manufacturing costs for calculation of…

Q: variable costing

A: What will be the difference in net earnings computed using variable costing as opposed toabsorption…

Q: Which of the following is true regarding the contribution margin ratio of a company that produces…

A: Contribution margin ratio =Contribution per unitSales price per unit Contribution per unit = Sales…

Q: If Mazoon Company sells unit outputs that exceed the breakeven point there will be a profit .a total…

A: Break even point means a point where firm is neither earning profit nor incurring any loss. For…

Q: Give an example of how, under absorption costing, operating income could fall even though the unit…

A: Definition:   Absorption Costing: The absorption costing is a method used to allocate the fixed…

Q: Product costs under variable costing are typically: Group of answer choices A. higher than under…

A:

Q: Target costing A target cost is 'a product cost estimate derived by subtracting the desired profit…

A: Target costing: A costing system that emphasizes on the minimization of existing and future design…

Q: True or False Product cost under Variable costing are DM, DL and VOH only.     Under absorption…

A: Solution:- Discussions of above statements as follows under:-

Q: Relevant of differential cost analysis takes all variable and fixed costs into account to analyze…

A: Differential cost analysis is the difference in cost for every alternative which helps in making the…

Q: What will be the difference in net earnings computed using variable costing as opposed to absorption…

A: Under variable costing, whole amount of fixed overhead will be charged in the income statement.…

Q: costs assigned to units in inventory are typically lower under absorption costing than under vanable…

A: As per the guidelines, only one question is allowed to be solved so I am answering the first…

Q: On a CVP graph for a profitable company, the total revenue (sales) line will be steeper than the…

A: The graphical representation of the cost-volume benefit analysis is a cost volume profit graph, also…

Q: Which of the following is not a potential advantage of variable costing relative absorption costing?…

A: Cost volume profit analysis is calculated by dividing the fixed cost by the unit contribution…

Q: This best accounts for the difference in profit between the absorption and variable costing *…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: If a company chooses a price to charge for its product by adding up all the expenses necessary to…

A: Solution: There are various method of pricing the product such as: 1. Target costing 2. Skimming…

Q: Under variable costing: a. Net operating income will always be higher than under absorption costing.…

A: Under variable costing, the inventory cost is valuate on the basis of variable manufacturing cost…

Q: Which of the following occurs if a company experiences a decrease in its fixed costs? Select one: a.…

A: Break-even point: In the accounting term break-even point is a condition where the income or profit…

Q: Which of the following costs are always incremental and relevant in decision analysis?       a)…

A: Avoidable  costs are those costs that can be avoided if some production is stopped or outsourcing of…

Q: When reconciling variable costing and absorption costing net operating income, fixed overhead costs…

A: Solution: S1. When reconciling variable costing and absorption costing net operating income, fixed…

Q: Each of a company's two product lines has a different contribution margin ratio. If the company's…

A: "Since you have asked multiple question we will solve the first question for you.  If you want any…

Q: What is happening to average costs when marginal cost is greater than average cost at a specific…

A: When marginal cost is greater than average cost (including average variable cost or average total…

Q: T, F. In a make or buy short-run decision situation, the critical element to consider is whether the…

A: Variable cost is that cost that varies with the number of units produced. It means that increase in…

Q: Variable costing has an advantage over absorption costing for which of the following purposes? all…

A: Under variable costing, the product cost consists of the variable cost incurred and total fixed cost…

Q: The break-even point in CVP analysis is defined as the point   1)  where output units equal input…

A: A Break-even point is a level of sales at which there is no profit or loss. Hence, at the break-even…

Q: the product with the higher contribution ratio , which of the following is true ? O a Fixed cost…

A: Below option is true:-  d. the average contribution margin ratio will increase

Q: Which of the following is not an assumption of break-even analysis? a. A company is operating within…

A: Break-Even Point:  It is the point of sales at which entity neither earns a profit nor suffers a…