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Strayer ACC 350 WK 10 Quiz 8 Chapter 9




Question;ACC 350 WK 10 Quiz 8 Chapter 9;1) The two most common methods of costing inventories in manufacturing companies are variable costing and fixed costing. Answer;2) Absorption costing "absorbs" only variable manufacturing costs. Answer;3) Variable costing includes all variable costs?both manufacturing and nonmanufacturing?in inventory. Answer;4) Under both variable and absorption costing, all variable manufacturing costs are inventoriable costs. Answer: 5) The;main difference between variable costing and absorption costing is the;way in which fixed manufacturing costs are accounted for. Answer;6) Under variable costing, fixed manufacturing costs are treated as an expense of the period. Answer: 7) The contribution-margin format of the income statement is used with absorption costing. Answer;8) The contribution-margin format of the income statement distinguishes manufacturing costs from nonmanufacturing costs. Answer;9) The gross-margin format of the income statement highlights the lump sum of fixed manufacturing costs. Answer;10) In absorption costing, all nonmanufacturing costs are subtracted from gross margin. Answer;11) Direct costing is a perfect way to describe the variable-costing inventory method. Answer;12) When variable costing is used, an income statement will show gross margin. Answer: 13) The income under variable costing will always be the same as the income under absorption costing. Answer;14) Absorption costing is required by GAAP (Generally Accepted Accounting Principles) for external reporting. Answer;15) When production deviates from the denominator level, a production-volume variance always exists under absorption costing. Answer;16) Fixed manufacturing costs included in cost of goods;available for sale + the production-volume variance will always = total;fixed manufacturing costs under absorption costing. Answer;17) The production-volume variance only exists under absorption costing and not under variable costing. Answer;18) When the unit level of inventory increases during an;accounting period, operating income is greater under variable costing;than absorption costing. Answer;19) The difference in operating income under;absorption costing and variable costing is due solely to the timing;difference of expensing fixed manufacturing costs. Answer: 20) If;managers report inventories of zero at the start and end of each;accounting period, operating incomes under absorption costing and;variable costing will be the same. Answer;21) Under absorption costing, managers can increase operating income by holding more inventories at the end of the period. Answer;22) Many companies use variable costing for internal reporting to reduce the undesirable incentive to build up inventories. Answer;23) Under variable costing, managers can increase;operating income by simply producing more inventory at the end of the;accounting period even if that inventory never gets sold. Answer;24) Nonfinancial measures such as comparing units in;ending inventory this period to units in ending inventory last period;can help reduce buildup of excess inventory. Answer;25) One of the most common problems reported by;companies using variable costing is the difficulty of classifying costs;into fixed or variable categories. Answer;26) Managers can increase operating income when absorption costing is used by producing more inventory. Answer: 27) A;manager can increase operating income by deferring maintenance beyond;the current accounting period when absorption costing is used. Answer;28) Throughput costing considers only direct materials and direct manufacturing labor to be truly variable costs. Answer;29) Throughput costing is also referred to as super-variable costing. Answer;30) When production quantity exceeds sales, throughput costing results in reporting greater operating income than variable costing. Answer;31) Throughput costing provides more incentive to produce for inventory than does absorption costing. Answer;More Questions are Included...


Paper#39239 | Written in 18-Jul-2015

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