Which of the following is true about absorption costing? No fixed factory overhead is charged to production. It is also known as direct costing. The term used to designate the difference between sales and cost of goods sold is the "manufacturing margin" Over-applied factory overhead is refilected in the income statement as a reduction from cost of good sold.

Which of the following is true about absorption costing? No fixed factory overhead is charged to production. It is also known as direct costing. The term used to designate the difference between sales and cost of goods sold is the "manufacturing margin" Over-applied factory overhead is refilected in the income statement as a reduction from cost of good sold.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 3MC: Which is not a step in analyzing the cost driver for manufacturing overhead? A. Identify the cost B....

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Similar questions

In the variable costing income statement, how are the fixed manufacturing costs reported, and how are the fixed selling and administrative expenses reported?
In the variable costing income statement, how are the fixed manufacturing costs reported, and how are the fixed selling and administrative expenses reported?
What are the distinguishing characteristics of variable, fixed, and semivariable factory overhead costs?
Which is not a step in analyzing the cost driver for manufacturing overhead? A. Identify the cost B. identify non-value-added costs C. analyze the effect on manufacturing overhead D. identify the correlation between the potential driver and manufacturing overhead
For which cost concept used in applying (he cost-plus, approach to product pricing are fixed manufacturing costs, fixed selling and administrative expenses, and desired profit allowed for in determining the markup? A. Total cost B. Product cost C. Variable cost D. Standard cost
Which of the following is not considered a product cost? A. direct materials B. direct labor C. indirect materials D. selling expense
Which of the following is NOT true ? a. The salary of the factory manager is considered to be an indirect cost of producing one unit of product. b. An indirect cost cannot be easily traced to a particular cost object. c. The classification of a cost as direct or indirect does not depend on the cost object. d. A direct cost can be easily traced to a particular cost object.
What is the key difference between Absorption Costing and Marginal Costing? A Absorption Costing treats Manufacturing Overhead as a period cost. B Marginal Costing treats Fixed Manufacturing Overhead as a period cost. C Absorption Costing only considers variable costs to calculate net income. D Marginal Costing only considers variable costs to calculate net income.
The difference between marginal costing and absorption costing net income centres on how to account for O a. direct material costs O b. fixed manufacturing overhead costs O c. variable and fixed manufacturing overhead costs O d. variable manufacturing overhead costs
Which of the following statements is true? In variable costing, fixed manufacturing overhead costs flows through the inventory accounts on the balance sheet before being recorded as sales revenue on the income statement. In variable costing, fixed manufacturing overhead costs flows through the inventory accounts on the balance sheet before being recorded as part of selling and administrative expenses on the income statement. In variable costing, fixed manufacturing overhead costs flows through the inventory accounts on the balance sheet before being recorded as part of cost of goods sold on the income statement. In variable costing, fixed manufacturing overhead costs are recorded as period expenses on the income statement as incurred.
Which of the following statement is false? Multiple Choice Fixed manufacturing overhead is treated as a product cost under absorption costing method. Variable costing method is more useful than absorption costing approach in internal and managerial decision-making. The absorption costing approach is used in external financial reporting. The contribution margin income statement format separates costs according to cost behaviour. Fixed manufacturing overhead is treated as a period cost under absorption costing method.
What factor, related to manufacturing costs, causes the difference in net earnings computedusing absorption costing and net earnings computed under variable costing?a. Absorption costing considers all costs in the determination of net earnings, whereasvariable costing considers only direct costs.b. Absorption costing allocates fixed costs between cost of goods sold and inventories, andvariable costing considers all costs to be period costs.c. Absorption costing" inventories" all fixed costs for the period in ending finished goodsinventory, but variable costing expenses all fixed costs.d. Absorption costing "inventories" all direct costs, but variable costing considers directcosts to be period costs.