In absorption costing, fixed manufacturing overhead is expensed________.
A) when all the other non-manufacturing fixed costs areexpensed
B) when the product is sold
C) at the end of the period in which it is paid
D) when the units are produced
50) Volplex, Inc. produces paper and office supplies and usesthe just-in-time inventory system. Currently, the company is usingvariable costing. Which of the following is true of the effect ofcosting systems on the financial results of Volplex?
A) Its operating income will besignificantly higher if the company uses absorption costing insteadof variable costing.
B) Its operating income will besignificantly lower if the company uses absorption costing insteadof variable costing.
C) Its operating income will vary alittle if the company uses absorption costing instead of variablecosting.
D) Its operating income will benegative if the company uses absorption costing instead of variablecosting.
51) For which of the following decisions is absorption costingmost appropriate?
A) decisions related to using the sales mix to maximizeprofitability
B) decisions related to controlling short-term costs
C) decisions related to setting sales prices in the long run
D) decisions related to increasing contribution margin
61) The direct materials budget is prepared using informationfrom the ________ budget.
A) cash
B) master
C) capital expenditure
D) production
64) The budgeted income statement________.
A) reports cash paid for purchases of direct materials
B) includes amounts from the sales, cost of goods sold, cash,and capital expenditures budgets
C) is accrual-based
D) does not include depreciation expense
68) Which of the following best describes a standard?
A) a sales price, cost, or quantity that is expected undernormal conditions
B) costs incurred to produce a product
C) budgeted amount for total product cost
D) actual sales price, cost, or quantity
69) A company is setting its direct materials and direct laborstandards for its leading product. Direct material costs from thesupplier are $9 per square foot, net of purchase discount.Freight-in amounts to $0.30 per square foot. Basic wages of theassembly line personnel are $19 per hour. Payroll taxes areapproximately 23% of wages. How much is the direct labor coststandard per hour? (Round your answer to the nearest cent.)
A) $4.37
B) $19.00
C) $23.37
D) $32.37
In absorption costing, fixed manufacturing overhead is expensed________.
A) when all the other non-manufacturing fixed costs areexpensed
B) when the product is sold
C) at the end of the period in which it is paid
D) when the units are produced
50) Volplex, Inc. produces paper and office supplies and usesthe just-in-time inventory system. Currently, the company is usingvariable costing. Which of the following is true of the effect ofcosting systems on the financial results of Volplex?
A) Its operating income will besignificantly higher if the company uses absorption costing insteadof variable costing.
B) Its operating income will besignificantly lower if the company uses absorption costing insteadof variable costing.
C) Its operating income will vary alittle if the company uses absorption costing instead of variablecosting.
D) Its operating income will benegative if the company uses absorption costing instead of variablecosting.
51) For which of the following decisions is absorption costingmost appropriate?
A) decisions related to using the sales mix to maximizeprofitability
B) decisions related to controlling short-term costs
C) decisions related to setting sales prices in the long run
D) decisions related to increasing contribution margin
61) The direct materials budget is prepared using informationfrom the ________ budget.
A) cash
B) master
C) capital expenditure
D) production
64) The budgeted income statement________.
A) reports cash paid for purchases of direct materials
B) includes amounts from the sales, cost of goods sold, cash,and capital expenditures budgets
C) is accrual-based
D) does not include depreciation expense
68) Which of the following best describes a standard?
A) a sales price, cost, or quantity that is expected undernormal conditions
B) costs incurred to produce a product
C) budgeted amount for total product cost
D) actual sales price, cost, or quantity
69) A company is setting its direct materials and direct laborstandards for its leading product. Direct material costs from thesupplier are $9 per square foot, net of purchase discount.Freight-in amounts to $0.30 per square foot. Basic wages of theassembly line personnel are $19 per hour. Payroll taxes areapproximately 23% of wages. How much is the direct labor coststandard per hour? (Round your answer to the nearest cent.)
A) $4.37
B) $19.00
C) $23.37
D) $32.37
Related questions
[The following information applies to the questionsdisplayed below.]
Diego Company manufactures one product that is sold for $72 perunit in two geographic regionsâthe East and West regions. Thefollowing information pertains to the companyâs first year ofoperations in which it produced 55,000 units and sold 50,000units. |
| Variablecosts per unit: | ||
| Manufacturing: | ||
| Directmaterials | $ | 23 |
| Direct labor | $ | 14 |
| Variablemanufacturing overhead | $ | 3 |
| Variable sellingand administrative | $ | 5 |
| Fixed costs peryear: | ||
| Fixed manufacturing overhead | $ | 770,000 |
| Fixed selling and administrativeexpenses | $ | 607,000 |
The company sold 37,000 units in the East region and 13,000units in the West region. It determined that $290,000 of its fixedselling and administrative expenses is traceable to the Westregion, $240,000 is traceable to the East region, and the remaining$77,000 is a common fixed cost. The company will continue to incurthe total amount of its fixed manufacturing overhead costs as longas it continues to produce any amount of its only product. |
1.
value:
10.00 points
Required information
| Required: | |
| 1. | What is the unitproduct cost under variable costing? |
2.
value:
10.00 points
Required information
| 2. | What is the unitproduct cost under absorption costing? |
3.
value:
10.00 points
Required information
| 3. | What is thecompanyâs total contribution margin under variable costing? |
References
eBook & Resources
WorksheetLearning Objective: 06-01 Explain howvariable costing differs from absorption costing and compute unitproduct costs under each method.Learning Objective: 06-03 Reconcilevariable costing and absorption costing net operating incomes andexplain why the two amounts differ.
Difficulty: 2 MediumLearning Objective: 06-02Prepare income statements using both variable and absorptioncosting.Learning Objective: 06-04 Prepare a segmented incomestatement that differentiates traceable fixed costs from commonfixed costs and use it to make decisions.
Check my work
4.
value:
10.00 points
Required information
| 4. | What is thecompanyâs net operating income (loss) under variablecosting? |
References
eBook & Resources
WorksheetLearning Objective: 06-01 Explain howvariable costing differs from absorption costing and compute unitproduct costs under each method.Learning Objective: 06-03 Reconcilevariable costing and absorption costing net operating incomes andexplain why the two amounts differ.
Difficulty: 2 MediumLearning Objective: 06-02Prepare income statements using both variable and absorptioncosting.Learning Objective: 06-04 Prepare a segmented incomestatement that differentiates traceable fixed costs from commonfixed costs and use it to make decisions.
Check my work
5.
value:
10.00 points
Required information
| 5. | What is thecompanyâs total gross margin under absorption costing? |
References
eBook & Resources
WorksheetLearning Objective: 06-01 Explain howvariable costing differs from absorption costing and compute unitproduct costs under each method.Learning Objective: 06-03 Reconcilevariable costing and absorption costing net operating incomes andexplain why the two amounts differ.
Difficulty: 2 MediumLearning Objective: 06-02Prepare income statements using both variable and absorptioncosting.Learning Objective: 06-04 Prepare a segmented incomestatement that differentiates traceable fixed costs from commonfixed costs and use it to make decisions.
Check my work
6.
value:
10.00 points
Required information
| 6. | What is thecompanyâs net operating income (loss) under absorptioncosting? |
References
eBook & Resources
WorksheetLearning Objective: 06-01 Explain howvariable costing differs from absorption costing and compute unitproduct costs under each method.Learning Objective: 06-03 Reconcilevariable costing and absorption costing net operating incomes andexplain why the two amounts differ.
Difficulty: 2 MediumLearning Objective: 06-02Prepare income statements using both variable and absorptioncosting.Learning Objective: 06-04 Prepare a segmented incomestatement that differentiates traceable fixed costs from commonfixed costs and use it to make decisions.
Check my work
7.
value:
10.00 points
Required information
| 7. | What is the amountof the difference between the variable costing and absorptioncosting net operating incomes (losses)? |
