BACC 222 Test 3

When units produced exceed units sold, net income will generally be higher under absorption or variable costing

absorption

For external reporting, income statements are generally prepared using

absorption costing

Financial statement users need to be aware of changes in inventory levels when using _______costing

absorption costinng

Variable costing net income may be computed by ________________multiplying the number of units sold by _______________

contribution margin per unit and subtractign fixed costd

The difference between reported net income on variable costing and absorption costing income statements is based on how

fixed overhead is accounted for

If a segment is entirely eliminated, common fixed costs will...

not change

Segment break-even calculations include Blank______ fixed expenses.

only traceable

Net operating income is higher under absorption costing when inventories increase T/F

true

for internal reporting, _____ costing is used

variable