Chapter 6 example #54854

Under absorption costing, product costs include: variable MOH fixed MOH a) yes yes b) no no c) yes no d) no yes Option A Option B Option C Option D

The principal difference between variable costing and absorption costing centers on: whether variable manufacturing costs should be included in product costs. whether fixed manufacturing costs should be included in product costs. whether fixed manufacturing costs and fixed selling and administrative costs should be included in product costs. whether selling and administrative costs should be included in product costs.

When using data from a segmented income statement, the dollar sales for a segment to break even is equal to: Common fixed expenses ÷ Unit CM Common fixed expenses ÷ Segment CM ratio Traceable fixed expenses ÷ Unit CM Traceable fixed expenses ÷ Segment CM ratio

Sechrest Corporation manufactures a single product. Last year, the company's variable costing net operating income was $80,500. Fixed manufacturing overhead costs released from inventory under absorption costing amounted to $18,400. What was the absorption costing net operating income last year? $18,400 $80,500 $98,900 $62,100

Gunderman Corporation has two divisions: the Alpha Division and the Charlie Division. The Alpha Division has sales of $230,000, variable expenses of $131,100, and traceable fixed expenses of $63,300. The Charlie Division has sales of $540,000, variable expenses of $307,800, and traceable fixed expenses of $120,700. The total amount of common fixed expenses not traceable to the individual divisions is $119,200. What is the company's net operating income? $147,100 $331,100 $27,900 $211,900

Parker Products Inc, a manufacturer, reported $123 million in sales and a loss of $18 million in its annual report to shareholders. According to a CVP analysis prepared for management, the company's break-even point is $115 million in sales. Required: Assuming that the CVP analysis is correct, is it likely that the company's inventory level increased, decreased, or remained unchanged during the year? Increased Decreased Remained unchanged

variable vs absorption costing chart

break even (sales $)

break even (units)