248) Net income reported under absorption costing will exceed net income reported under variable costing for a given period if

A) production equals sales for that period.

B) sales exceed production for that period.

C) production exceeds sales for that period.

D) variable overhead exceeds fixed overhead for that period.

249) The income statement is organized by ________ under absorption costing.

A) period costs only

B) fixed costs only

C) variable costs only

D) product and period costs

250) What will happen to the contribution margin if fixed costs related to a product increase while variable costs and sales price remain constant?

A) Will increase

B) Will not change

C) Will decrease

D) Will stay the same

251) What factor related to manufacturing costs causes the difference between operating income computed using absorption costing and operating income computed using variable costing?

A) Absorption costing expenses all costs, whether fixed or variable.

B) Absorption costing “inventories” all direct manufacturing costs.

C) Absorption costing “inventories” all fixed manufacturing costs.

D) Absorption costing “inventories” all fixed manufacturing and period costs.

252) By increasing ________, a manager can increase operating income under absorption costing.

A) variable costs

B) fixed costs

C) production

D) leased assets

253) Absorption costing is required to be used for

A) federal income tax reports.

B) external financial reports, but not income taxes.

C) neither external financial reports nor income tax reports.

D) both external financial reports and income tax reports.

254) The use of either absorption or variable costing will make little difference in companies

A) using just-in-time inventory methods.

B) with large inventories.

C) with high fixed costs.

D) with high variable costs.

255) Which of the following does not appear on an income statement prepared using variable costing?

A) Fixed production costs

B) Contribution margin

C) Gross margin

D) Variable production costs

256) Schrute Farm Sales buys portable generators for $450 and sells them for $720. He pays a sales commission of 5% of sales revenue to his sales staff. Mr. Schrute pays $2,000 a month rent for his store, and also pays $1,700 a month to his staff in addition to the commissions. Mr. Schrute sold 200 generators in June. If Mr. Schrute prepares a contribution margin income statement for the month of June, what would be his contribution margin?

A) $241,200

B) $ 97,200

C) $46,800

D) $144,000

257) Schrute Farm Sales buys portable generators for $450 and sells them for $720. He pays a sales commission of 5% of sales revenue to his sales staff. Mr. Schrute pays $2,000 a month rent for his store, and also pays $1,700 a month to his staff in addition to the commissions. Mr. Schrute sold 200 generators in June. If Mr. Schrute prepares a traditional income statement for the month of June, what would be his gross profit?

A) $234,000

B) $144,000

C) $90,000

D