Acct 202 Exam 2

In an income statement prepared using the variable costing method, fixed manufacturing overhead would:

be used in the computation of net operating income but not in the computation of the contribution margin.

In an income statement prepared using the variable costing method, fixed selling and administrative expenses would:

be used in the computation of net operating income but not in the computation of the contribution margin.

In an income statement prepared as an internal report using variable costing, variable selling and administrative expenses would:

be used in the computation of the contribution margin.

When sales exceed production, the net operating income reported under variable costing generally will be:

greater than net operating income reported under absorption costing.

When production exceeds sales, the net operating income reported under absorption costing generally will be:

greater than net operating income reported under variable costing.