30. Net operating income reported under absorption costing will exceed net operating income reported 1 answer below »

 
   

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30. Net operating income reported under absorption
costing will exceed net operating income reported under variable costing for a
given period if:
A. production equals sales for that period.
B. production exceeds sales for that period.
C. sales exceed production for that period.
D. the variable manufacturing overhead exceeds the fixed manufacturing overhead.

31. If the number of units produced exceeds the number
of units sold, then net operating income under absorption costing will:
A. be equal to the net operating income under variable costing.
B. be greater than net operating income under variable costing.
C. be equal to the net operating income under variable costing plus total
fixed manufacturing costs.
D. be equal to the net operating income under variable costing less total
fixed manufacturing costs.

32. Over an extended period of time in which the final
ending inventories are zero, the accumulated net operating income figures
reported under absorption costing will be:
A. greater than those reported under variable costing.
B. less than those reported under variable costing.
C. the same as those reported under variable costing.
D. higher or lower since no generalization can be made.

33. In an income statement segmented by product line,
a fixed expense that cannot be allocated among product lines on a
cause-and-effect basis should be:
A. classified as a traceable fixed expense and not allocated.
B. allocated to the product lines on the basis of sales dollars.
C. allocated to the product lines on the basis of segment margin.
D. classified as a common fixed expense and not allocated.

34. A common cost that should not be assigned to a
particular product on a segmented income statement is:
A. the product’s advertising costs.
B. the salary of the corporation president.
C. direct materials costs.
D. the product manager’s salary.

35. All other things being equal, if a division’s
traceable fixed expenses increase:
A. the division’s contribution margin ratio will decrease.
B. the division’s segment margin ratio will remain the same.
C. the division’s segment margin will decrease.
D. the overall company profit will remain the same.

36. All other things equal, if a division’s traceable
fixed expenses decrease:
A. the division’s segment margin will increase.
B. the overall company net operating income will decrease.
C. the division’s contribution margin will increase.
D. the division’s sales volume will increase.

37. Segment margin is sales minus:
A. variable expenses.
B. traceable fixed expenses.
C. variable expenses and common fixed expenses.
D. variable expenses and traceable fixed expenses.

38. Clayton Company produces a single product. Last
year, the company’s variable production costs totaled $8,000 and its fixed
manufacturing overhead costs totaled $4,800. The company produced 4,000 units
during the year and sold 3,600 units. Assuming no units in the beginning
inventory:
A. under variable costing, the units in ending inventory will be costed at
$3.20 each.
B. the net operating income under absorption costing for the year will be
$480 lower than net operating income under variable costing.
C. the ending inventory under variable costing will be $480 lower than the
ending inventory under absorption costing.
D. the net operating income under absorption costing for the year will be
$800 lower than net operating income under variable costing.

39. Gangwer Corporation produces a single product and
has the following cost structure:

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The absorption costing unit product cost is:
A. $95
B. $119
C. $61
D. $56