Acct. Ch. 20

Both fixed and variable factory costs are included as a part of cost of goods sold when accounting for absorption costing.

Both fixed and variable factory costs are included as a part of cost of goods sold when accounting for variable costing

When units manufactured are less than the number of units sold, the variable costing income from operations will be ________ that of absorption costing. a)less than b) greater than c) equal to d) None of these choices are correct

When the units manufactured are greater than the units sold, finished goods inventory ________. a) increases b) decreases c) remains unchanged d) cannot be determined

Under absorption costing, increasing finished goods inventory causes ________. a) operating income to increase b) operating income to decrease c) per-unit product costs to increase d) None of these choices are correct.

_________ costs are costs that can be influenced (increased or decreased) by management at a specific level. a) Internal b) External c) Fixed d) Controllable

Which of the following costs are controllable costs for operating management? a) Fixed manufacturing overhead costs b) Salaries of production supervisors c) Factory utilities d) Variable manufacturing costs

Markets can be divided into market segments by ________. a) sales territories b) product lines c)salespersons d) All of these choices are correct.

The contribution margin ratio is computed as ________. a) contribution margin multiplied by sales b) contribution margin divided by sales c) contribution margin less sales, divided by sales d) None of these choices are correct.

A difference between the planned and actual contribution margin may be caused by an increase or a decrease in ________. a) sales and variable costs b) sales and fixed costs c) variable and fixed costs d) None of these choices are correct.

The __________ is the effect of a difference in the number of units sold, assuming no change in unit sales price or unit cost. a) quantity factor b) unit price factor c) sales deviation d) None of these choices are correct.

Under variable costing, which of the following costs would not be included in finished goods inventory? a. direct labor cost b. direct materials cost c. fixed factory overhead cost d. variable factory overhead cost

Under absorption costing, which of the following costs would not be included in finished goods inventory? a. overtime wages paid to factory workers b. hourly wages of assembly worker c. the salaries for salespeople d. straight-line depreciation on factory equipment

Which of the following would not be an appropriate activity base for cost analysis in a service firm? a. customers served b. lawns mowed c. haircuts given d. inventory produced

Management should focus its sales and production efforts on the product or products that will provide a. the maximum contribution margin b. the highest sales revenue c. the lowest product costs d. the lowest direct labor hours

The relative distribution of sales among various products sold is referred to as the: a. by-product mix b. profit mix c. sales mix d. joint product mix

On the variable costing income statement, the figure representing the difference between manufacturing margin and contribution margin is the: a. fixed manufacturing costs b. fixed selling and administrative expenses c. variable selling and administrative expenses d. variable cost of goods sold

Under variable costing, which of the following costs would be included in finished goods inventory? a. neither variable nor fixed factory overhead cost b. both variable and fixed factory overhead cost c. only variable factory overhead cost d. only fixed factory overhead cost

Under variable costing, which of the following costs would not be included in finished goods inventory? a. wages of machine operator b. steel costs for a machine tool manufacturer c. electricity used by factory machinery d. salary of factory supervisor

For a supervisor of a manufacturing department, which of the following costs are controllable? a. insurance on factory building b. sales salaries c. depreciation of factory building d. direct materials