21 in absorption costing all nonmanufacturing costs are subtracted from gross margin 4302458

 

21) In absorption costing, all nonmanufacturing costs are subtracted from gross margin.

22) Direct costing is a perfect way to describe the variable-costing inventory method.

 

23) The distinction between absorption costing and variable costing is most important for which type of industry?

A) manufacturing

B) marketing

C) retail

D) service

E) educational

 

24) When all fixed manufacturing costs and variable manufacturing costs are included as inventorial costs, the method being used is

A) absorption costing.

B) fixed overhead costing.

C) manufacturing overhead costing.

D) variable costing.

E) direct costing.

 

25) The method of costing that excludes fixed manufacturing costs from inventorial costs is known as

A) absorption costing.

B) fixed overhead costing.

C) manufacturing overhead costing.

D) variable costing.

E) full manufacturing costing.

Use the information below to answer the following question(s).

 

Honda Heaven produces and sells an auto part for $20.00 per unit. Direct materials are $8 per unit, while direct manufacturing labour averages $1.50 per unit. Variable manufacturing overhead is $0.50 per unit and fixed manufacturing overhead is $250,000 per year. Administrative expenses, all fixed, run $90,000 per year, with sales commissions of $2 per part. Production is 100,000 parts per year. And this year, 75,000 boxes were sold.

 

26) What is Honda Heaven's inventory cost per box using variable costing?

A) $9.50

B) $10.00

C) $12.50

D) $13.40

E) $15.40

 

27) What is Honda Heaven's inventorial cost per box using absorption costing?

A) $9.50

B) $10.00

C) $12.50

D) $13.40

E) $15.40

 

28) Under variable costing, which of the following expenses is inventoriable?

A) variable manufacturing overhead

B) direct manufacturing labour and fixed manufacturing overhead

C) marketing and direct manufacturing labour

D) variable manufacturing overhead and administrative

E) variable and fixed manufacturing overhead

29) Absorption costing is also known as

A) direct costing.

B) full absorption costing.

C) non-traditional costing.

D) manufacturing costing.

E) variable costing.

 

30) Variable costing regards fixed manufacturing overhead as

A) an unexpired cost.

B) an inventoriable cost.

C) a period expense.

D) a product cost.

E) a deferred asset.