David Keyes Authors. Authors E. Authors Authors Authors Authors E. Larry Deppe Larry Deppe E. Authors Authors E. Authors David Keyes Authors Authors. Larry Deppe E. David Keyes E. Authors Larry Deppe E. Under variable costing, fixed manufacturing overhead cost is treated as a product cost. True False. The unit product cost under absorption costing does not include fixed manufacturing overhead cost.

Variable manufacturing overhead costs are treated as period costs under both absorption and variable costing. When reconciling variable costing and absorption costing net operating income, fixed manufacturing overhead costs deferred in inventory under absorption costing should be added to variable costing net operating income to arrive at the absorption costing net operating income. When production is less than sales for the period, absorption costing net operating income will generally be less than variable costing net operating income.

Assuming that a segment has both variable expenses and traceable fixed expenses, an increase in sales should increase profits by an amount equal to the sales times the segment margin ratio. The salary of the treasurer of a corporation is an example of a common cost which normally cannot be traced to product segments.

Segmented statements for internal use should be prepared in the contribution format. Fixed costs Roberts Company Produces A Single Product are traceable to a segment may become common if the segment is Roberts Company Produces A Single Product into smaller units. The contribution margin is viewed as a better gauge of the long run profitability of a segment than the segment margin. In responsibility accounting, each segment Roberts Company Produces A Single Product an organization should be charged with the costs for which it is responsible and over which it has control plus its share of common organizational costs.

The contribution margin tells us what happens to profits as volume changes if a segment's capacity and fixed costs change as well. Only those costs that would disappear over time if a segment were eliminated should be considered traceable costs of the segment.

In segment reporting, sales dollars is usually an appropriate allocation base for selling, general, and administrative expenses. A segment is any portion or activity of an organization about which a manager seeks revenue, cost, or profit data. Selling price per unit, variable cost per unit, and total fixed cost are the same in each year.

Which of the following statements is not correct? Under Local Utility Company costing, net operating income for Year 1 and Year 2 would be the same.

Because of the changes in production levels, under variable costing the unit product cost will change each year. The total net operating income for all four years combined would be the same under variable and absorption costing. Under absorption costing, net operating income in Year 4 would be less than the net operating income in Year 2.

Would the following costs be classified Us Branch Of Uk Company product or period costs under variable costing at a retail clothing store? Which of the following are considered to be product costs under variable costing? Variable manufacturing overhead.

Fixed manufacturing overhead. Selling and administrative expenses. I and II. I and III. Which Zurich American Insurance Company Bloomberg the following are considered to be product costs under absorption costing?

Under variable costing, Roanoke Gas Company Payments that are treated as period costs include: A.

Selling and administrative expenses are considered to be: A. A portion of the total fixed manufacturing overhead cost incurred during a period may: A. A company using lean production methods likely would show approximately the Roberts Company Produces A Single Product net operating income under both absorption and variable costing because: A.

Dull Corporation has been producing and selling electric razors for the past ten years. Shown below are the actual net operating incomes for the last three years of operations at Dull:. Dull Corporation's cost structure and selling price has not changed during its ten years of operations. Based on the information presented above, which of the following statements is true? Dull Corporation operated above the breakeven point in each of the three years presented. In Year 10, Dull Corporation produced fewer Roberts Company Produces A Single Product than Country Motor Company sold.

Net operating income reported under absorption costing will exceed net operating income reported under variable costing for a given period if: A. If the number of units produced exceeds the number of units sold, then net operating income under absorption costing will: A. Over an extended period of time in which the final ending inventories are zero, the accumulated net operating income figures reported under absorption costing will be: A.

In an income statement segmented by product line, a fixed expense that cannot be allocated Korean Automobile Company Logos product lines on a cause-and-effect basis should be: A. A common cost that should not be assigned to a particular product on a segmented income statement is: A. All other things being equal, if a division's traceable fixed expenses increase: A. All other things equal, if a division's traceable fixed expenses decrease: A.

Segment margin is sales minus: A. Clayton Company produces a single product. The company produced 4, units during the year and sold 3, units. Assuming no units in the beginning inventory: A. Olds Inc. There were no beginning or ending inventories. The absorption costing unit product cost was: A. What is the total period cost for the month under variable costing?

Cockriel Inc. The variable costing unit product cost was: A. What is the total period cost for the month under absorption costing? Roy Corporation produces a single product. During July, Roy produced 10, units. Costs incurred during the month were as follows:.

Under absorption costing, any unsold units would be carried in the inventory account at a unit product cost of: A. What is the net operating income for the month under variable costing?

What is the net operating income for the month under absorption costing? The total gross margin for the month under absorption costing is: A. A company produces a single product. There was no beginning inventory. Under variable costing, net operating income would be: A. The total contribution margin for the month under variable costing is: A. What was the absorption costing net operating income last year? Sproles Inc. Roberts Company produces a single product. The company produced the same number of units last year.

Evans Company produces a single product. There were no beginning inventories. If 22, units were produced last year, then sales for last year were: A. Craft Company produces a single product. If 21, units were produced last year, then sales last year were: A. Moore Company produces a single product. The company produced 5, units during the year and sold 4, units.

There were no units in the beginning inventory. Which of the following statements is true? Tsuchiya Corporation manufactures a variety of products. Stephen Company produces a single product.

Last year, the company had 20, units in its ending inventory. The company uses a last-in-first-out LIFO inventory flow assumption. Given these facts, the number of units of product in the beginning inventory last year must have been: A.

Hansen Company produces a single product. Hatch Company has two divisions, O and E. Given this data, the sales for Division E for last year were: A.