61) Which format does the CICA Handbook advocate for reporting income?

A) Direct costing

B) Variable costing

C) Indirect costing

D) Full costing

62) All manufacturing costs are assigned to the product under which method of product costing?

A) Direct costing

B) Variable costing

C) Absorption costing

D) Fixed costing

DeJager Company reported the following information about the production and sales of its only product:

Direct materials used

$32,000

Direct labour

$20,000

Variable factory overhead

$12,000

Fixed factory overhead

$16,000

Variable selling and administrative expenses

$  4,000

Fixed selling and administrative expenses

$  6,000

Beginning inventories

none

Ending inventories:

Direct materials

-0-

WIP

-0-

Finished goods

600 units

Sales ($45 per unit)

$63,000

63) The cost of producing one unit of product using variable costing would be

A) $32.

B) $40.

C) $45.

D) $26.

64) The cost of producing one unit of product using absorption costing would be

A) $32.

B) $26.

C) $45.

D) $40.

65) The ending inventory under variable costing would be

A) $24,000.

B) $27,000.

C) $19,200.

D) $15,600.

66) The ending inventory under absorption costing would be

A) $27,000.

B) $24,000.

C) $15,600.

D) $19,200.

Schultz Company reported the following information about the production and sales of its only product:

Direct materials used

$64,000

Direct labour

$40,000

Variable factory overhead

$24,000

Fixed factory overhead

$32,000

Variable selling and administrative expenses

$  8,000

Fixed selling and administrative expenses

$12,000

Beginning inventories

none

Ending inventories:

Direct materials

-0-

WIP

-0-

Finished goods

600 units

Sales ($90 per unit)

$126,000

67) The cost of producing one unit of product using variable costing would be

A) $64.

B) $80.

C) $90.

D) $52.

68) The cost of producing one unit of product using absorption costing would be

A) $64.

B) $52.

C) $90.

D) $80.

69) The ending inventory under variable costing would be

A) $48,000.

B) $54,000.

C) $38,400.

D) $31,200.

70) The ending inventory under absorption costing would be

A) $54,000.

B) $48,000.

C) $31,200.

D) $38,400.



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