Data for a firm’s first year of operation is given below. The fire uses absorption costing: Units produced (no work in process) 6,000
CA_experts4uQUESTIONS:
If a decision process must be made to close a warehouse, non-refundable prepaid rent on the warehouse is a(n)________cost.
A. Opportunity
B. Common
C. Sunk
D. Variable
When the balance in ending finished goods inventory increases, net income under absorption costing is:
A. Lower then under direct costing
B. Higher then under direct costing
C. The same under direct costing
D. Unaffected by the increase
Which of the following is NOT a consideration regarding a special order?
A. If the company has sufficient capacity
B. If the special order jeopardized sales to existing customers
C. Federal laws regarding the price
D. Whether employee moral would be affected.
Costs that are not directly traceable to a specific segment of a business are called____ costs.
A. Sunk
B. Common
C. Fixed
D. Incremental
Which of the following is NOT true of the direct costing procedure?
A. Variable and fixed costs are considered as part of the cost of goods manufactured.
B. The cost of goods sold, based solely on variable costs, is subtracted from net sales to arrive at the manufacturing margin.
C. Variable selling expenses are deducted from the manufacturing margin
D. Variable administrative expenses are deducted from the manufacturing margin.
Data for a firm’s first year of operation is given below. The fire uses absorption costing:
Units produced (no work in process) 6,000
Units sold 5,000
Units in ending inventory of finished goods 1,000
Variable manufacturing cost unit $75
Variable selling and admin, expenses for each unit sold $16
Fixed manufacturing costs for the year $90,000
Fixed selling and admin, expenses for year $65,000
Question:
The cost of the goods sold the first year is $:
A. 270,000
B. 225,000
C. 150,000
D. 450,000
9 years ago
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