Inventory Costing And Capacity Analysis

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Question 1
Free
Multiple Choice

Which of the following costs is inventoried when using variable costing?

Choose correct answer/s
A

rent on factory building

B

electricity consumed in manufacturing process

C

sales commission paid on each sale

D

advertising costs incurred for the product

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Question 2
Free
Multiple Choice

Which of the following costs is inventoried when using absorption costing?

Choose correct answer/s
A

variable selling costs

B

fixed administrative costs

C

variable manufacturing costs

D

fixed selling costs

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Question 3
Free
Multiple Choice

Which of the following best describes how fixed cost are treated in a variable cost method?

Choose correct answer/s
A

They are part of the product cost

B

They are excluded from inventory cost and are treated as period costs

C

They are allocated to the product cost using a denominator-level capacity choice

D

They are classified as nonmanufacturing costs

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Question 4
Free
Multiple Choice

________ is a method of inventory costing in which all variable manufacturing costs and all fixed manufacturing costs are included as inventoriable costs.

Choose correct answer/s
A

Variable costing

B

Mixed costing

C

Absorption costing

D

Standard costing

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Question 5
Free
Multiple Choice

Which of the following is true of absorption costing?

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A

It expenses marketing costs as cost of goods sold.

B

It treats direct manufacturing costs as a period cost.

C

It includes fixed manufacturing overhead as an inventoriable cost.

D

It treats indirect manufacturing costs as a period cost.

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Question 6
Multiple Choice

Which of the following is true of variable costing?

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A
It expenses administrative costs as cost of goods sold.
B
It treats direct manufacturing costs as a product cost.
C
It includes fixed manufacturing overhead as an inventoriable cost.
D
It is required for external reporting to shareholders.
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Question 7
Multiple Choice

In ________ , fixed manufacturing costs are included as inventoriable costs.

Choose correct answer/s
A
variable costing
B
absorption costing
C
throughput costing
D
activity-based costing
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Question 8
Multiple Choice

________ method includes fixed manufacturing overhead costs as inventoriable costs.

Choose correct answer/s
A
Variable costing
B
Absorption costing
C
Throughput costing
D
Activity-based costing
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Question 9
Multiple Choice

Which of the following costs will be treated as period costs under absorption costing?

Choose correct answer/s
A
raw materials used in the production
B
sales commission paid on sale of product
C
depreciation on factory equipment
D
rent for factory building
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Question 10
Multiple Choice

Under absorption costing, fixed manufacturing costs ________ .

Choose correct answer/s
A
are period costs
B
are inventoriable costs
C
are treated as an expense
D
are sunk costs
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Question 11
Multiple Choice

________ is a method of inventory costing in which only variable manufacturing costs are included as inventoriable costs.

Choose correct answer/s
A
Fixed costing
B
Variable costing
C
Absorption costing
D
Mixed costing
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Question 12
Multiple Choice

Variable costing regards fixed manufacturing overhead as a(n) ________ .

Choose correct answer/s
A
administrative cost
B
inventoriable cost
C
period cost
D
product cost
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Question 13
Multiple Choice

AAA Manufacturing Inc, makes a product with the following costs per unit:
Direct materials $180
Direct labor $20
Manufacturing overhead (variable) $30
Manufacturing overhead (fixed) $130
Marketing costs $75
What would be the inventoriable cost per unit under variable costing and what would it be under absorption costing?

Choose correct answer/s
A
$180 for variable costing and $305 under absorption costing
B
$230 for variable costing and $305 under absorption costing
C
$230 for variable costing and $360 under absorption costing
D
$200 for variable costing and $305 under absorption costing
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Question 14
Multiple Choice

Time Again, LLC produces and sells a mantel clock for $100 per unit. In 2017, 42,125 clocks were produced and 37,958 were sold. Other information for the year includes:
image
What is the inventoriable cost per unit using variable costing?

Choose correct answer/s
A
$66.00
B
$51.50
C
$48.00
D
$103.50
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Question 15
Multiple Choice

Time Again LLC produces and sells a mantel clock for $100 per unit. In 2017, 41,000 clocks were produced and 37,000 were sold. Other information for the year includes:
image
What is the inventoriable cost per unit using absorption costing?

Choose correct answer/s
A
$49.00
B
$53.00
C
$117.00
D
$106.00
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Question 16
Multiple Choice

Fast Track Auto produces and sells an auto part for $60 per unit. In 2017, 120,000 parts were produced and 75,000 units were sold. Other information for the year includes:
image
What is the inventoriable cost per unit using variable costing?

Choose correct answer/s
A
$20
B
$25
C
$28
D
$35
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Question 17
Multiple Choice

Fast Track Auto produces and sells an auto part for $85 per unit. In 2017, 110,000 parts were produced and 90,000 units were sold. Other information for the year includes:
image
What is the inventoriable cost per unit using absorption costing?

Choose correct answer/s
A
$30.00
B
$36.00
C
$37.18
D
$40.00
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Question 18
True/False

Variable costing only includes direct manufacturing costs in inventoriable costs.

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True
False
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Question 19
True/False

The unit cost of a product is always higher in variable costing than in absorption costing.

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True
False
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Question 20
True/False

Under variable costing, lease charges paid on the factory building is an inventoriable cost.

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True
False
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