Test 3 review

It would be acceptable to have the selling price of a product just above the variable costs and expenses of making and selling it in

both the short and long run

In the variable costing income statement, deduction of variable selling and administrative expenses from manufacturing margin yields

contribution margin

The contribution margin ration is computed s

contribution margin divided by sales

Which of the following would be an inappropriate activity base for cost analysis in a service firm?

inventory produced

Under variable costing, which of the following costs would be included in finished goods inventory?

only variable factory overhead cost

Which of the following is a reason for easy identification and control of variable manufacturing costs under the variable costing method?

A. Variable costs can be controlled by the operating equipment B. Variable and fixed costs are reported separately c. Fixed Costs such as property insurance, are normally the responsibility of higher management not the operating management D. All of these choices

For a supervisor of a manufacuring department, which of the following costs is controllable?

Direct Materials

under absorption costing, which of the following costs would be included in finished goods inventory?

Direct labor, direct materials, and all factory overhead costs

Management should focus its sales and production efforts on the product or products that will provide the

maximum contribution margin