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Exam 5: Variable Costing for Management Analysis

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Question 31

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The relative distribution of sales among various products sold is referred to as the:

A) by-product mix
B) joint product mix
C) profit mix
D) sales mix

E) A) and B)
F) A) and C)

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Question 32

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In the absorption costing income statement, deduction of the cost of goods sold from sales yields contribution margin.

A) True
B) False

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Question 33

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For a period during which the quantity of product manufactured exceeded the quantity sold, income from operations reported under absorption costing will be smaller than income from operations reported under variable costing.

Philadelphia Company has the following information for March: Determine the March a manufacturing margin, b contribution margin, and c income from operations for Philadelphia Company.

Contribution margin reporting can be beneficial for analyzing which of the following?

Fixed costs are $10 per unit and variable costs are $25 per unit.Production was 13,000 units, while sales were 12,000 units.Determine a whether variable costing income from operations is less than or greater than absorption costing income from operations, and b the difference in variable costing and absorption costing income from operations.

Accountants prefer the variable costing method over absorption costing method for evaluating the performance of a company because

A business operated at 100% of capacity during its first month, with the following results: What is the amount of the manufacturing margin that would be reported on the variable costing income statement?

In contribution margin analysis, the effect of a difference in unit sales price or unit cost on the number of units sold is termed the unit price or unit cost factor.

S&P Enterprises sold 10,000 units of inventory during a given period.The level of inventory of the manufactured product remained unchanged.The manufacturing costs were as follows: Which of the following statements is true?

Management may use both absorption and variable costing methods for analyzing a particular product.

What is the amount of the gross profit that would be reported on the absorption costing income statement?

Match -May be used in a manufacturing company.

For short-run production planning, information in the absorption costing format is more useful to management than is information in the variable costing format.

In contribution margin analysis, the unit price or unit cost factor is computed as:

Match -Generally provides the most useful report for setting long-term prices.

On the variable costing income statement, the figure representing the difference between manufacturing margin and contribution margin is the:

A business operated at 100% of capacity during its first month and incurred the following costs: If 1,600 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the variable costing balance sheet?

Companies prepare contribution margin reports by market segments and product segments because products contribute to profitability in various ways.

Match -Generally provides the most useful report for controlling costs.