51) Which of the following methods is required for external financial reporting?

A) Contribution approach

B) Variable costing

C) Direct costing

D) Absorption approach

52) When using the absorption approach to costing,

A) all variable costs are inventoriable.

B) all indirect manufacturing costs are inventoriable.

C) all fixed costs are treated as period costs.

D) all direct manufacturing costs are treated as period costs.

53) Absorption costing classifies costs as either product costs or

A) period costs.

B) fixed costs.

C) prime costs.

D) conversion costs.

54) Which of the following terms appears on an income statement prepared using the contribution approach but NOT on an income statement using absorption costing?

A) Operating income

B) Gross profit

C) Contribution margin

D) Sales

55) When using the contribution approach to costing,

A) all factory overhead is inventoriable.

B) all indirect manufacturing costs are inventoriable.

C) all selling expenses are deducted from the contribution margin.

D) all fixed costs are treated as period costs.

56) Absorption costing is also known as all of the following EXCEPT

A) direct costing.

B) full costing.

C) traditional approach.

D) functional approach.

57) Variable costing regards fixed manufacturing overhead as

A) an unexpired cost.

B) an inventoriable cost.

C) a charge against sales.

D) a product cost.

58) Variable costing is commonly called

A) full costing.

B) direct costing.

C) traditional costing.

D) absorption costing.

59) All of the following are inventoriable costs under variable costing EXCEPT

A) direct materials.

B) direct labour.

C) variable manufacturing overhead.

D) fixed manufacturing overhead.

60) The only difference between variable and absorption costing is the accounting for

A) direct labour.

B) fixed manufacturing overhead.

C) direct materials.

D



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