Accounting 2020 Ch 7 Review

Which of the following statements are correct regarding income statements prepared under variable and absorption costing?

-Both income statements include product and period costs. -Reported net income on the statements often differ.

Put'er There manufactures baseball gloves. Each glove requires $22 of direct materials and $18 of direct labor. Variable manufacturing overhead cost is $7 per unit and fixed manufacturing overhead cost is $19,000 in total. Variable selling and administration costs are $11 per unit sold and fixed selling and administration costs are $13,200. Last period, 800 gloves were produced, and 585 gloves were sold. The unit product cost using the variable costing is:

Unit product cost= $22 + $18 + $7= $47. Selling and administrative costs are never apart of product costs.

Segment contribution margin equals segment revenue minus the ____ expenses for the segment.

Variable

Absorption Costing is:

Required by GAAP and IFRS -Used by most companies for both internal and external reports