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    CamScanner 06-19-2023 09.21

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    CamScanner 06-19-2023 09.21

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    CamScanner 06-19-2023 09.21

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    of 4
    274 Chapter:10* Multiple Choice 1.” Under variable costing, fixed manufacturing overhead is: a. carried in a liability account. b. carried in an asset account, . ignored. immediately charged against sales as a period cost. Which one of the following statements i$ true for a firm that uses variable 2, costing? : i a. The, unit product cost changes because of changes in the number of +- 2. units manufactured. Profit fluctuates with sales. ‘Any underapplied overhead is calculated into the product cost. d. Product costs include variable administration costs. 3. A principal difference between variable costing and absorption costing centers on: 4 : a. whether variable manufacturing costs should be included as product * costs. : 4 whether fixed manufacturing costs should be included as product costs. c. whether fixed manufacturing costs and. fixed selling and administrative costs shoilld be included as product costs. d. none of these. 4. Under variable costing: : and downward inl response to a; net income will tend to move upward changes in levels of production. : inventory costs will always be lower than under absorption costing. = net income will tnd to vary inversely with production changes. d. . net income will always be higher than under absorption costing. 5.- When sales are constant, but the production lével fluctuates, net income determined by the variable costing miethod will: a. fluctuate in direct proportion to changes in production: remain constant. 2 fluctuate inversely with changes in production. d. be greater than net income under absorption costing. 6. The costing method that treats all fixed costs as period costs is: a. absorption costing. variable costing. b. _job-order costing, 7 process costing. Scanned with CamScanner $$ titer 7. Under absorption costing, fixed factory overhead costs: @ are deferred in inventory when production exceeds sales. . are always treated as period costs. c. are released from inventory when production exceeds sales, d. none of these, 8. WB Company computes net income under both the absorption costing approach and the variable costing approach, For a given year, the absorption costing net income was greater than the variable costing net income, This fact suggests that: a. variable manufacturing cots were less than fixed manufacturing costs. ® ‘more units were produced during the year than were sold. ‘more units were sold during the year than were produced. . common costs were greater than variable costs forthe year, 9, Net income computed using variable costing would exceed net income computed using absorption costing if units sold exceed units produced. units sold are less than units produced. ¢. units sold equal units produced, 4. the unit fixed cost is zero, 10. When sales are constant, but the production level fluctuates, net income. determined by the absorption costing method will: fl tend to fluctuate in the same direction as fluctuations in the level of production, : b. tend to remain constant. c. tend to fluctuate inversely with fluctuations in the level of production, d. none of these. 11. Manga, Inc. manufactured. 700 units last. year. The ending inventory consisted of 100 units, There was no beginning inventory. Variable manufacturing costs were P6.00 per unit and fixed manufacturing costs ‘were P2,00 per unit, What would be the change in the peso amount of ending inventory if variable costing was used instead of absorption costing? a. " P800 decrease c PO P200 decrease. d. P200 inorease 12. Variable production costs are P12 per unit and variable selling and administrative expenses are P3 per unit. Fixed manufacturing overhead. totals P36,000 and fixed selling and administration expenses total 40,000. ‘Assuming a beginning inventory of zero, production of 4,000 units and sales of 3,600 units, the peso value of the ending inventory under variable ing would be: A800. c. P6,000. b. P8400. 4. P3,600. Scanned with CamScanner 276. Chapter 10 13, The following data pertain to last year's operations at HP Corp Units in beginning inventory a Units produced 5 Unis sold an ‘Selling price per unit P100.00 Variable costs per unit: Direct materials P1200 Direct labor 2500 Variable manufacturing overhead 3.00 Variable selling and administrative 2.00 Fixed costs per year: Fixed manufacturing overhead 500,000 600,000 Fixed selling and administrative What was the variable costing net income,ast year? = a. P12,000 P 2A b. 57,000 f P27,000 14, - Last year, Mayumi Company had income of P40,000 using variable costing. Beginning and ending inventories were 22,000 and 27,000 units, f the fixed manufacturing overhead cost was P3.00 per unit, respectively. I what was the income using absorption costing? + a 15,000 ‘ c,’ “P40,000 ~ b. P25,000 @ = P55,000 15, The following data pertain to last year’s operations at Léis, Incorporated: Units in beginning inventory : : 0 Units produced : 400,000 Units sold 98,000 Seling pricé per unit . : P10.00 Variable costs per unit: ~ Direct materials % : P1.50 Direct labor 2.50 Variable manufacturing overhead 4.00 Variable seling and administrative 2.00 Fixed costs per year: : ‘ Fixed manufacturing overhead —.~ P200,000 Fixed seling and administrative a0 Scanned with CamScanner sie variable Costing 277 ‘What was the absorption costing net income last year? a. 44,000 ©. P50,000 @ P8.000 é. 49,000 Questions 16 through 19 refer to the following: Magic Company manufactures a single product. The following data pertain to the company’s operations last year: Selling price per unit: Pas __ Variable costs per unit Production : PB ” Selling and administrative P2 Fixed costs in total: Production } = 48,000 Selling and administrative 36,000 At the beginning of the year there was no units in inventory. A total of 12,000 units were produced during the year, and 10,000 units were sold. 16. Under variable costing, the unit product cost is: P 8.00. ; _ 7G P1200. P10.00. d. P14.00. 17. Under absorption costing, the unit product cost is: a P8,00. © P12.0(. b. P10.00. & P1S.00, 18, The net income under variable costing would be: a. P64,000. 56,000. b. P60,000. i P52,000. 19. The net income under absorption costing would be: a. the same as the income under variable costing. 8,000 greater than the income under variable costing. P12,000 greater than the income under variable costing. 8,000 less than the income under variable costing. 20. A company had a net income of P85,500 using variable costing and a net income of P90,000 using absorption costing. Total fixed manufacturing, overhead was P150,000, and production was 100,000 units, Between the beginning and the end of the year, the inventory level: a. _ increased by 4,000 units. increased by 3,000 units.

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