ACCT 201B - Chapter 7 Video Book

When the number of units produced is greater than the number of units sold, variable costing net operating income will be ________.

less than absorption costing net operating income

Excerpt from Areojet Corporation records for month of February: Per UnitPer Month Selling price $200,000 Direct materials used in production 40,000 Direct labor 10,000 Variable manufacturing overhead 2,000 Fixed manufacturing overhead $140,000 Variable selling and administrative expenses 20,000 Fixed selling and administrative expenses 40,000 Assuming the absorption costing method is used, what is the total manufacturing costs per unit added to work in process during the month of February?

$92,000

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 ________.

fixed overhead costs

Absorption costing income statements ignore ________.

variable and fixed cost distinctions

Excerpt from Areojet Corporation records for month of February: Per UnitPer Month Selling price $200,000 Direct materials used in production 40,000 Direct labor 10,000 Variable manufacturing overhead 2,000 Fixed manufacturing overhead $140,000 Variable selling and administrative expenses 20,000 Fixed selling and administrative expenses 40,000 Assuming the variable costing method is used, what is the total manufacturing costs added to work in process during the month of February?

$52000