11) The contribution approach is a method of internal reporting that emphasizes the distinction between variable and fixed costs for the purpose of better decision making.
12) In the contribution approach, all factory overhead is considered to be product costs that are expensed as incurred.
13) Variable costing is also referred to as the contribution approach.
14) Fixed manufacturing overhead is excluded from the cost of products under absorption costing.
15) Absorption costing is more widely used than variable costing.
16) In variable costing, inventories are valued at standard variable costs.
17) A production-volume variance is calculated as the applied volume minus the actual volume multiplied by the actual-overhead rate.
18) Absorption costing separates costs into manufacturing and non-manufacturing categories.
19) There is no difference between variable-costing and absorption-costing income if the inventory level does not change.
20) Absorption-costing income is not affected by production volume.