COMM 225 CHAPTER 8 EXAM QUESTIONS & ANSWERS Concordia University

COMM 225 CHAPTER 8 EXAM QUESTIONS & ANSWERS 2024-2025
Concordia University
Full costing is equivalent to absorption costing.


False




True

resp_1




In full or absorption costing, all manufacturing costs are charged to the product.


True

resp_1



False




Variable costing is the approach used for external reporting under generally accepted accounting principles.


False

resp_2



True




Fixed manufacturing costs are not charged to the product under variable costing.


False




True

resp_1




Fixed manufacturing overhead is a period cost under absorption costing.

, True




False

resp_2




Manufacturing cost per unit will be higher under variable costing than under absorption costing.


False

resp_2



True




When units sold exceed units produced, income under absorption costing is higher than income under variable costing.


False

resp_2



True




When absorption costing is used for external reporting, variable costing can still be used for internal reporting purposes.


True

resp_1



False




The use of absorption costing facilitates cost-volume-profit analysis.


True




False

resp_2

, When absorption costing is used, management may be tempted to overproduce in a given period in order to increase net
income.


True

resp_1



False




Which cost is not charged to the product under variable costing?




fixed manufacturing overhead
resp_4




direct materials




variable manufacturing overhead




direct labour




Obama Company sells its product for $40 per unit. During 2009, it produced 60,000 units and sold 50,000 units (there was no
beginning inventory). Costs per unit are: direct materials $10, direct labour $6, and variable overhead $2. Fixed costs are:
$480,000 manufacturing overhead, and $60,000 selling and administrative expenses.


The per unit manufacturing cost under absorption costing is




$18.




resp_3 $26.