Net operating income fluctuates directly with changes in sales volume.       Fixed production and fixed selling costs are considered to be product costs.       Unit product costs can change as a result of changes in the number of units manufactured.       Variable selling expenses are included in product costs.

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

A: Absorption is an important method of costing in Accounting System. It refers to those costs which…

Q: When unit sales are constant, but the number of units produced fluctuates and everything else…

A: Solution:- B) remain constant.

Q: Which of the following is NOT true of variable costing?     a. Profits may increase though sales…

A: Variable costing is a concept used in managerial and cost accounting in which the fixed…

Q: Which of the following may form the basis for the price a company (working at full capacity) should…

A: Opportunity costs : The benefit foregone by the company by employing the resource in other…

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

A: Variable costing is a method in which only variable cost is considered in product cost. Absorption…

Q: If the units produced exceed the units sold, which method would you expect to show the higher net…

A: Variable Costing: Variable Costing takes into account only variable manufacturing costs for…

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: 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: Which of the following statements is false ? a. Volume-based costing has typically resulted in…

A: There are two methods of costing that are in place generally. One is volume based costing and other…

Q: When units produced exceed units sold, how does operating income differ between variable costing and…

A: Absorption costing:   Absorption costing is compulsory under Generally Accepted Accounting…

Q: Explain why there is a difference in the operating profit and operating income under the two methods…

A: The product cost in an absorption costing method includes all variable and fixed production…

Q: When the number of units sold exceed the number of units produced, income reported under absorption…

A: Fixed overhead costs include those costs which shall not vary with the production output. In…

Q: Which of the following would most likely decrease the product cost per unit under variable costing?…

A: Under variable costing, product cost per unit will comprise of direct material cost , direct labour…

Q: ?Which of the following statements is false Activity-based costing typically provides less…

A: In order to solve in this question, we need to analyse the given statement one-by-one.

Q: Describe how total variable costs and unit variable costs behave with changes in the level of…

A: Since you have asked questions with multiple sub-parts, we shall be answering thefirst 3 for you.…

Q: When units sold exceeds units produced the relationship between net income under absorption costing…

A: THE VARIABLE COSTING METHOD TREATS FIXED MANUFACTURING OVERHEAD COSTS AS PERIOD COSTS , ALL FIXED…

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: Which of the following may form the basis for the price a company (working at full capacity) should…

A: There are several type of costs that are being incurred in business. These are fixed costs, variable…

Q: Under variable costing a. Net income will tend to vary inversely with production changes b. Net…

A: DM=Direct materials OHD=Overhead   Step 1   Variable costing is a method that only allocates…

Q: How does Lean Production reduce or eliminate the difference in reported net operating income between…

A: Absorption Costing: Absorption costing is a method for calculating the full cost or total cost of a…

Q: What is the high-low method used to estimate? a. variable costs and production capacity b. total…

A: The high-low method is a method using which the variable cost per unit and total fixed cost is…

Q: Two companies have identical fixed expenses, unit variable expenses, and profits. Yet one company…

A:

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: TRUE OR FALSE When units sold exceed, units produced, income under absorption costing is higher…

A: Absorption costing is the full costing method under which all the costs related to manufacturing are…

Q: What is the basic difference between variable costing and absorption costing? a. Variable costing…

A: Absorption costing: Absorption costing is also called traditional costing. This method of costing…

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

A: Cost - volume - profit analysis  It is used to determine the changes in cost and volume of sales…

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: Which of the following statements is true? O a. Activity-based costs per unit are always greater…

A: The volume based costing represents the cost allocation to a single cost pool. The high volume…

Q: A mixed cost contains: a variable element and a fixed element. both selling and administrative…

A: Mixed costs are that cost which contain a portion of both fixed and variable costs. Common examples…

Q: the operating incomes from absorption costing and variable costing are the same when A. Units…

A: Absorption Costing and Variable Costing are the two methods of ascertaining cost and determining…

Q: variable costing

A: Option a is wrong because even if there is no change in the fixed costs in the beginning and ending…

Q: Which among the following is not true about traditional costing system? a. This method allocates…

A: Traditional costing is allocating the factory overhead to products based on the volume of the…

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: In detail discuss what are  the advantages and disadvantages of using FIFO for process costing. In…

A: First-in First-out(FIFO) method under process costing is based on the assumption that at the…

Q: TRUE OR FALSE Net income under variable costing is closely tied to changes in sales levels.

A: Fixed cost remains same under the variable costing. No matter how much units are produced, the total…

Q: Throughput costing   • Treats all cost as period cost except for direct materials • Is very suitable…

A: Variable Costing: Variable Costing is technique of costing which does not considers the fixed cost…

Q: Under variable costing, all fixed costs (including fixed product costs) are expense in the period…

A: The matching principle is the fundamental concept of accounting. It suggests that the expenses…

Q: Which of the following statements is true? O a. Activity-based costing typically provides less…

A: Volume based costing represents the product costing where factory overhead is allocated to the…

Q: Which one of the following is correct about variable costing systems? Select one: a. Normally result…

A: Under the variable costing system, the product cost includes direct material, direct labor, direct…

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 followings is not correct about cost-based pricing? Select one: a. Total fixed costs…

A: Cost based pricing is the method to set selling price based on the cost. To get selling price,…

Q: A cost that would be included in product costs under both absorption costing and variable costing…

A: The key difference between variable and absorption costing approaches is that while absorption…

Q: TRUE OR FALSE Companies that use just-in-time processing techniques will have significant…

A: A just-in-time inventory system is an inventory management system wherein the company makes the…

Q: When units manufactured exceed units sold: variable costing income is greater than absorption…

A: Under absorption costing, fixed manufacturing overhead is treated as product cost. Under variable…

Q: same industry for same product b.the same firm for same product c.the several firm for same…

A: b. Multiple costing is a technique of using two or more costing methods for ascertainment of cost by…

Q: How is operating income affected if the number of units sold exceeds the number of units produced?…

A: Under variable costing, fixed manufacturing overhead is considered as a period cost and deducted a…