Horngren 14th ed. Cost Accounting Ch. 9 Exam Questions with Complete Solutions

Horngren 14th ed. Cost Accounting Ch. 9 Exam Questions with Complete Solutions Which of the following cost(s) are inventoried when using variable costing? a) direct manufacturing costs b) variable marketing costs c) fixed manufacturing costs d) both a and b are correct. - Correct Answers: a) direct manufacturing costs Which of the following cost(s) are inventoried when using absorption costing? a) direct manufacturing costs b) variable marketing costs c) fixed manufacturing costs d) both a and c are correct - Correct Answers: d) both a and c are correct __________ is a method of inventory costing in which all variable manufacturing costs (direct and indirect) are included as inventoriable costs and all fixed manufacturing costs are excluded. a) variable costing b) Mixed Costing c) Absorption costing d) standard costing - Correct Answers: a) variable costing absorption costing is required for all of the following except: a) GAAP b) determining a competitive selling price c) external reporting to shareholders d) income tax reporting - Correct Answers: b) determining a competitive selling price Absorption costing: a) expenses marketing costs as cost of goods sold b) treat direct manufacturing costs as period cost c) includes fixed manufacturing overhead as an inventoriable cost d) is required for internal reports to managers - Correct Answers: c) includes fixed manufacturing overhead as an inventoriable cost variable costing a) expenses administrative costs as COGS b) treats direct manufacturing costs as a product cost c) include fixed manufacturing overhead as an inventoriable cost d) is required for external reporting to shareholders - Correct Answers: b) treat direct manufacturing costs as a product cost _______ method(s) expense(s) variable marketing costs in the period incurred. a) variable costing b) absorption costing c) throughput costing d) all of there answers are correct - Correct Answers: b) absorption costing _______ method(s) expense(s) fixed manufacturing overhead costs as inventoriable costs a) variable costing b) absorption costing c) throughput costing d) all of there answers are correct - Correct Answers: b) absorption costing _______ method(s) expense(s) direct materials as costs of goods sold a) variable costing b) absorption costing c) throughput costing d) all of there answers are correct - Correct Answers: d) all of these answers are correct.... ________ method(s) is required for tax reporting purposes a) variable costing b) absorption costing c) throughput costing d) all of there answers are correct - Correct Answers: b) absorption costing _________ is a method of inventory costing in which only variable manufacturing costs are included as inventoriable costs. a) fixed costing b) variable costing c) absorption costing d) mixed costing - Correct Answers: b) variable costing the contribution margin format of the income statement: a) is used with absorption costing b) calculates gross margin c) distinguishes between manufacturing and non manufacturing costs d) is used with variable costing - Correct Answers: d) is used with variable costing The gross-margin format of the Income Statement: a) is used with variable costing b) is used with absorption costing c) calculates contribution margin d) distinguishes variables costs from fixed costs - Correct Answers: b) is used with absorption costing the contribution-margin format of the income statement: a) is used with absorption costing b) highlights the lump sum of fixed manufacturing costs c) distinguishes manufacturing costs from nonmanufacturing costs d) calculates gross margin - Correct Answers: b) highlights the lump sum of fixed manufacturing costs the gross-margin format of the income statement: a) distinguishes between manufacturing and non manufacturing costs b) distinguishes variable costs from fixed costs c) is used with variable costing d) calculates contribution margin - Correct Answers: a) distinguishes between manufacturing and non manufacturing costs ________ are subtracted from sales to calculate contribution margin a) variable manufacturing costs b) variable selling and administrative costs c) fixed manufacturing costs d) Both a and b are correct - Correct Answers: d) both a and b are correct ________ are subtracted from sales to calculate gross margin a) variable manufacturing costs b) variable selling and administrative costs c) fixed manufacturing costs d) Both a and c are correct - Correct Answers: d) both a and c are correct the difference between operation incomes under variable costing and absorption costing centers on how to account for: a) direct materials b) fixed manufacturing costs c) variable manufacturing costs d) both b and c are correct - Correct Answers: b) fixed manufacturing costs variable and absorption costing may be combined with all costing systems EXCEPT: a) mixed costing b) actual costing c) normal costing d) standard costing - Correct Answers: a) mixed costing throughput contribution equals: a) variable costs minus fixed costs b) revenues minus all direct labor costs c) revenues minus all direct material COGS d) revenues minus manufacturing overhead - Correct Answers: c) revenues minus all direct material COGS ________ reduces theoretical capacity for unavoidable operating interruption a) practical capacity b) theoretical capacity c) master-budget capacity utilization d) normal capacity utilization - Correct Answers: a) practical capacity ________ is the level of capacity based on producing at full efficiency all the time a) practical capacity b) theoretical capacity c) normal capacity d) demand capacity - Correct Answers: b) theoretical capacity Which of the following inventory costing methods shown is most likely to cause undesirable incentives for managers to build up finished goods inventory? a) absorption costing b) variable costing c) throughput costing d) direct costing - Correct Answers: a) absorption costing