ACCT TEST 2
Contribution approach
An income statement that separates costs into variable variable and fixed categories
variable costing approach (Fixed manufacturing overhead)
Period Cost
5. Variable costing approach (Variable selling and administrative expenses)
Period cost
Variable costing approach (Fixed selling and administrative expenses)
Period cost
Variable costing approach (Variable manufacturing overhead)
Product Cost
variable costing approach (Direct labor)
Product Cost
Which of the following costing approaches is best suited for cost-volume-profit analysis? Absorption Normal Standard Variable
Variable
Segment
any part or activity of an organization about which managers seek cost, revenue or profit data
When the units produced are equal to the units sold, the net operating income computed using the variable costing method is _________ the net operating income using the absorption costing method.
equal to
The difference between absorption costing net operating income and variable costing net operating income can be explained by the way these two methods account for _________ all overhead costs fixed overhead costs selling and administrative expenses variable overhead costs
fixed overhead costs
When the units produced are less than the units sold, the net operating income computed using the variable costing method is _________ the net operating income using the absorption costing method.
greater than
When the units produced exceed the units sold, the net operating income computed using the variable costing method is _________ the net operating income using the absorption costing method.
less than
When the number of units produced is greater than the number of units sold, variable costing net operating income will be _________ the same as absorption costing net operating income greater than absorption costing net operating income less than absorption costing net operating income
less than absorption costing net operating income
Break Even Point
the level of sales at which profit is 0
Absorption costing income statements ignore _________ direct materials and direct labor costs direct and indirect cost distinctions product and period cost distinctions variable and fixed cost distinctions
variable and fixed cost distinctions Correct