BUS 3301: FINANCIAL ACCOUNTING- Practice To All Qu
BUS 3301: FINANCIAL ACCOUNTING- Practice to all Qu
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BUS 3301: FINANCIAL ACCOUNTING- Practice to all Quizzes || Questions and 100% Verified Answers.
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BUS 3301: FINANCIAL ACCOUNTING- Practice to all Qu
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BUS 3301: FINANCIAL ACCOUNTING- Practice To All Qu
Which of the following costing methods is the more traditional method? correct answers Absorption Costing
Which cost element represents the key difference between absorption costing and variable costing? correct answers Fixed Manufacturing Overhead
(T/F)
Gross profit would appear in a va...
BUS 3301: FINANCIAL ACCOUNTING- Practice to all
Quizzes || Questions and 100% Verified Answers.
Which of the following costing methods is the more traditional method? correct answers
Absorption Costing
Which cost element represents the key difference between absorption costing and variable
costing? correct answers Fixed Manufacturing Overhead
(T/F)
Gross profit would appear in a variable costing income statement. correct answers FALSE
(T/F)
With both variable costing and absorption costing, all selling and administrative costs, whether
they be fixed or variable, are expensed in the period incurred. correct answers TRUE
If the level of inventory increases during a period, then which method will produce the higher
income? correct answers Absorption Costing
The determination of business segments is driven by: correct answers The evaluation units
judged by operating decision makers
Which costs would not be considered in assessing segment margin in a contribution income
statement? correct answers Non Traceable costs
In a contribution income statement, the contribution margin is the result of subtracting what
amount from net sales? correct answers Variable cost of goods sold and variable selling and
administrative expenses
(T/F)
The controllable contribution margin is computed by subtracting fixed costs (that are both
controllable by a segment and directly traceable to the segment) from the contribution margin
correct answers TRUE
The controllable contribution margin minus uncontrollable fixed costs yields the: correct answers
Segment margin
(T/F)
The controllable contribution margin would be useful in judging management performance.
correct answers TRUE
,(T/F)
Segment data cannot be presented for external reporting purposes correct answers FALSE
The allocation of service department costs to productive departments, without involving any
allocations of costs between service departments, is called: correct answers The Direct Method
A business dashboard is a modern information system that delivers real time information to
managers in a format that can best be described as a: correct answers Customizable Layout
With variable costing all fixed production costs are subtracted from current period revenues;
whereas, with absorption costing fixed overhead may be allocated between ______ and _______
correct answers Cost of Goods Sold / Inventory
Under variable costing, the contribution margin corresponds to sales minus ____________costs,
while absorption costing measures ____________ as sales minus cost of goods sold. correct
answers Variable / Gross Proft
The cost component that is included in inventory with absorption costing, but not variable
costing, is ____________factory overhead. correct answers Fixed
A ____________ income statement provides top management with an understanding of how
individual responsibility centers affect total firm profitability. correct answers Contribution
The ____________ contribution margin is computed by subtracting fixed costs that are both
controllable by the segment's management and directly traceable to the segment from the
contribution margin. correct answers Controllable
A controllable contribution margin minus uncontrollable ____________ costs yields the segment
margin. correct answers Fixed
____________ is a concept whereby operating income is reduced for the cost of capital
associated with operating assets. correct answers Residual Income
The ____________ method allocates the cost of selected service departments partially to other
service departments. correct answers Step
Also known as full costing -- a costing method where inventory absorbs direct costs and variable
and fixed factory overhead correct answers Absorption Costing
An internal report that identifies each segment's controllable elements; the contribution margin,
controllable fixed costs, uncontrollable fixed costs, and segment margin correct answers
Contribution Income Statement
,An internal assessment technique that adjusts income for a presumed cost of capital (or other
threshold rate of return); operating income - (operating assets X cost of capital) correct answers
Residual Income
A business unit for which separate financial information is evaluated by an operating decision
maker who allocates resources and judges performance of the unit correct answers Segment
An allocation process whereby some service department costs may be assigned to other service
departments as part of a sequential methodology correct answers Step method/Allocating service
cost
A costing method where inventory absorbs direct costs and variable factory overhead; the
income statement identifies the contribution margin correct answers Variable Costing
Which of the following statements is incorrect?
a. Absorption costing is also known as product costing.
b. Variable costing is not GAAP.
c. Only variable manufacturing costs are assigned to products under the variable costing
approach.
d. When using a variable costing system, the contribution margin discloses the excess of
revenues over variable costs. correct answers A)
Absorption costing is also known as full costing.
Product can be conducted by either absorption or variable costing methods.
Income computed by the absorption costing method will tend to exceed income computed by the
variable costing method if:
a. Fixed manufacturing costs decrease.
b. Units sold exceed units produced.
c. Variable manufacturing costs decrease.
d. Units produced exceed units sold. correct answers D)
Wang Company provides the following information for their first year of operation:
Sales
5,000 units @ $10
, Selling and administrative costs:
Fixed - $1,000
Variable - $1 per unit
Variable production costs per unit:
Direct materials - $2
Direct labor - $2
Variable OH - $1
Fixed Factory OH - $7,500
Production - 7,500 units
If Wang uses absorption costing, cost of goods sold would be: correct answers C) $16,500
The 5,000 units have a per unit cost of $6 each
Variable production cost ($2 + $2 + $1) $5
Fixed factory overhead $1
Total = $6
Wang Company provides the following information for their first year of operation:
Sales
5,000 units @ $10
Selling and administrative costs:
Fixed - $1,000
Variable - $1 per unit
Variable production costs per unit:
Direct materials - $2
Direct labor - $2
Variable OH - $1
Fixed Factory OH - $7,500
Production - 7,500 units
If Wang uses variable costing, operating income would be: correct answers A) $11,500
Sales (5,000 units X $10) $50,000
Less variable costs:
COGS (5,000 X $5) $25,000
SG&A (5,000 X $1) 5,000 30,000
______
Contribution Margin $20,000
Less Fixed Costs:
Manufacturing $7,500
SG&A 1,000
8,500
_____
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