Objective 9.1

 

1) Which of the following cost(s) are inventoried when using variable costing?

A) direct manufacturing costs

B) variable marketing costs

C) fixed manufacturing costs

D) Both A and B are correct.

 

2) Which of the following cost(s) are inventoried when using absorption costing?

A) direct manufacturing costs

B) variable marketing costs

C) fixed manufacturing costs

D) Both A and C are correct.

 

3) ________ is a method of inventory costing in which all variable manufacturing costs (direct and indirect) are included as inventoriable costs and all fixed manufacturing costs are excluded.

A) Variable costing

B) Mixed costing

C) Absorption costing

D) Standard costing

4) Absorption costing is required for all of the following except:

A) generally accepted accounting principles

B) determining a competitive selling price

C) external reporting to shareholders

D) income tax reporting

 

5) Absorption costing:

A) expenses marketing costs as cost of goods sold

B) treats direct manufacturing costs as a period cost

C) includes fixed manufacturing overhead as an inventoriable cost

D) is required for internal reports to managers

 

6) Variable costing:

A) expenses administrative costs as cost of goods sold

B) treats direct manufacturing costs as a product cost

C) includes fixed manufacturing overhead as an inventoriable cost

D) is required for external reporting to shareholders

 

7) ________ method(s) expense(s) variable marketing costs in the period incurred.

A) Variable costing

B) Absorption costing

C) Throughput costing

D) All of these answers are correct.

8) ________ method(s) include(s) fixed manufacturing overhead costs as inventoriable costs.

A) Variable costing

B) Absorption costing

C) Throughput costing

D) All of these answers are correct.

 

9) ________ method(s) expense(s) direct material costs as cost of goods sold.

A) Variable costing

B) Absorption costing

C) Throughput costing

D) All of these answers are correct.

 

10) ________ method(s) is required for tax reporting purposes.

A) Variable costing

B) Absorption costing

C) Throughput costing

D) All of these answers are correct.