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Multiple Choice Quiz
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1
Which product-costing system expenses fixed manufacturing costs as they occur?
A)Absorption-costing
B)Variable-costing
C)Production-costing
D)Activity-based costing
2
Which product-costing system treats fixed manufacturing costs as product costs?
A)Absorption-costing
B)Variable-costing
C)Production-costing
D)Throughput costing
3
Which type of income statement includes fixed manufacturing overhead incurred during the time period covered by the income statement in the cost of goods manufactured?
A)An absorption-costing income statement
B)A variable-costing income statement
C)A historical-costing income statement
D)An external-reporting income statement
4
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Assume there is no beginning or ending finished goods or work-in-process inventories. What is the gross margin, under an absorption costing income statement?
A)$280,000
B)$200,000
C)$50,000
D)$110,000
5
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Assuming no variable selling and administration expenses, what is the contribution margin, under a variable costing income statement?
A)$160,000
B)$240,000
C)($10,000)
D)$80,000
6
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What is the difference in the per-unit cost of production between an absorption-costing basis and a variable-costing basis (assume no beginning or ending work-in-process or finished goods inventory)?
A)$ 6 per unit
B)$ 9 per unit
C)$11 per unit
D)no difference
7
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There are 2,000 units in ending finished goods inventory. What is the difference in value of ending finished goods between an absorption-costing basis and a variable-costing basis?
A)$18,000
B)$ 9,000
C)$ 6,000
D)No difference
8
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What is the difference in net income between absorption-costing and variable-costing income statements, assuming there is no ending or beginning inventory?
A)$ 80,000
B)$170,000
C)$ 90,000
D)No difference
9
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What is the difference in net income between absorption-costing and variable-costing income statements, if the ending inventory is 1,000 units?
A)$ 8,000
B)$17,000
C)$ 9,000
D)No difference
10
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Using absorption costing, determine the net income for the period.
A)$30,000
B)$20,000
C)$90,000
D)$60,000
11
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Using variable costing, determine the net income for the period.
A)$30,000
B)$15,000
C)$20,000
D)$60,000
12
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Last period, 13,000 units were produced. In the current period, 15,000 units were produced. In each period, 13,000 units were sold. What is the difference in reported income under absorption and variable costing for the current period?
A)The variable-costing income exceeded absorption-costing income by $4,000
B)The absorption-costing income exceeded variable-costing income by $8,000
C)The variable-costing income exceeded absorption-costing income by $6,000
D)The absorption-costing income exceeded variable-costing income by $12,000
13
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Last period, 13,000 units were produced, 11,000 units were sold. In the current period, 15,000 units were produced and 17,000 units were sold. What is the difference in reported income under absorption and variable costing for the current period?
A)The variable-costing income exceeded absorption-costing income by $4,000.
B)The absorption-costing income exceeded variable-costing income by $8,000.
C)The variable-costing income exceeded absorption-costing income by $8,000.
D)The absorption-costing income exceeded variable-costing income by $12,000.
14
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Use the 'shortcut' method of reconciling the difference in reported income under absorption costing and variable costing to determine the variable costing income.
A)$14,000
B)$46,000
C)$30,000
D)$24,000
15
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Use the 'shortcut' method of reconciling the difference in reported income under absorption costing and variable costing to determine the variable costing income.
A)$14,000
B)$45,000
C)$30,000
D)$24,000
16
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What is the break-even point in units?
A)4,000
B)2,250
C)22,500
D)15,000
17
Which of the following statements is false?
A)Variable-costing highlights the separation of fixed and variable costs.
B)Variable and absorption costing income statements show fixed selling expenses as a lump sum.
C)Absorption costing is consistent with CVP analysis.
D)Under absorption costing, fixed manufacturing overhead is applied to products on a per unit basis.
18
Which of the following is an analysis of the components of variable and fixed costs that can be used to determine the break-even point in units or dollars?
A)Comparative statement analysis.
B)Variance analysis.
C)Cost-volume-profit analysis.
D)Horizontal analysis.
19
Under which of the following will the differences between reported operating income on an absorption-costing income statement and on a variable-costing income statement be insignificant (or minimal) when unit production exceeds unit sales?
A)FIFO (first-in, first-out) inventory
B)LIFO (last-in, first-out) inventory
C)Average inventory
D)Just-in-time (JIT) inventory management
20
An asset is a thing of value owned by the organization and having which characteristic?
A)A relatively long life.
B)A relatively short life.
C)Having provided past services.
D)Future service potential.
21
When using throughput costing, which of the following is assigned for direct costs as the cost of products or services?
A)Only unit-level spending
B)Only facility-level spending
C)Both unit-level and facility-level spending
D)Only product-sustaining-level spending
22
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What is the gross margin under throughput costing, if direct material is the only cost that qualifies as a throughput cost?
A)$200,000
B)$380,000
C)$320,000
D)$100,000





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