RAT #7 Chapter 20
Under absorption costing, which of the following costs would NOT be included in finished goods inventory?
the salaries for salespeople
Under absorption costing, which of the following costs would NOT be included in finished goods inventory?
variable and fixed selling and administrative expenses
Which of the following would be included in the cost of a product manufactured according to absorption costing?
depreciation expense on factory building
Another name for variable costing is:
direct costing
Under variable costing, which of the following costs would be included in finished goods inventory?
only variable factory overhead cost
Under absorption costing, which of the following costs would be included in finished goods inventory?
variable and fixed factory overhead cost, direct materials cost, direct labor cost
Under variable costing, which of the following costs would be included in finished goods inventory?
wages of carpenters in a furniture factory
What term is commonly used to describe the concept whereby the cost of manufactured products is composed of direct materials cost, direct labor cost, and all factory overhead cost?
Absorption costing
What term is commonly used to describe the concept whereby the cost of manufactured products is composed of direct materials cost, direct labor cost, and variable factory overhead cost?
Variable costing
Which of the following would be included in the cost of a product manufactured according to variable costing?
direct materials
Under variable costing, which of the following costs would be included in finished goods inventory?
direct materials cost, direct labor cost, variable factory overhead cost
Under variable costing, which of the following costs would NOT be included in finished goods inventory?
fixed factory overhead cost
Under absorption costing, which of the following costs would be included in finished goods inventory?
overtime wages paid to factory workers, hourly wages of assembly worker, straight-line depreciation on factory equipment
