Answered: True/False 1. Under absorption…

Business

Accounting

True/False 1. Under absorption costing, the company calculates gross margin

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 15MC: Absorption costing is also referred to as: A. direct costing B. marginal costing C. full costing D....

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1. Under absorption costing, the company calculates gross margin

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Absorption costing is also referred to as: A. direct costing B. marginal costing C. full costing D. variable costing
In the variable costing income statement, how are the fixed manufacturing costs reported, and how are the fixed selling and administrative expenses reported?
Which is not a step In activity-based costing? A. identify the activities performed by the organization B. identify the cost driver(s) associated with each activity C. compute a cost rate per production D. assign costs to products by multiplying the cost driver rate by the volume of the cost driver units consumed by the product
Using this information from Planters. Inc., what is the cost per unit under both variable and absorption costing?
Happy Trails has this information for its manufacturing: Â Its income statement under absorption costing is: Prepare an income statement with variable costing and a reconciliation statement between both methods.
In the variable costing income statement, how are the fixed manufacturing costs reported, and how are the fixed selling and administrative expenses reported?
Using the costs listed in the previous problem, classify the costs as either product costs or period costs.
Under absorption costing, a unit of product includes which costs? A. direct material, direct labor, and manufacturing overhead B. direct material, direct labor, and variable manufacturing overhead C. direct material, direct labor, and fixed manufacturing overhead D. direct material, direct labor, and all variable manufacturing overhead
Product costs under variable costing are typically: A. higher than under absorption costing B. lower than under absorption costing C. the same as with absorption costing D. higher than absorption costing when inventory increases
In the cost equation Y=a+bx, Y represents which of the following? A. fixed costs B. variable costs C. total costs D. units of production
The amount of a units sales price that helps to cover fixed expenses is its ____________________. A. contribution margin B. profit C. variable cost D. stepped cost
When might activity-based costing be preferred over using a relative amount of product sales in allocating selling and administrative expenses to products?