81. Which of the following statements is correct using the direct costing concept? A. All manufacturing costs are included in the calculation of cost of goods manufacturedB. Only fixed costs are included in the calculation of cost of goods manufactured while variable costs are considered period costs.C. Only variable manufacturing costs are included in the calculation of cost of goods manufactured while fixed costs are considered period costs.D. All manufacturing costs are considered period costs.
82. The amount of income under absorption costing will be more than the amount of income under variable costing when units manufactured: A. exceed units soldB. equal units soldC. are less than units soldD. are equal to or greater than units sold
83. The level of inventory of a manufactured product has increased by 7,000 units during a period. The following data are also available:
Variable
Fixed
Unit manufacturing costs of the period
$12.00
$6.00
Unit operating expenses of the period
4.00
1.50
What would be the effect on income from operations if absorption costing is used rather than variable costing? A. $42,000 decreaseB. $42,000 increaseC. $52,500 increaseD. $59,500 increase
84. The level of inventory of a manufactured product has increased by 8,000 units during a period. The following data are also available:
Variable
Fixed
Unit manufacturing costs of the period
$24
$10
Unit operating expenses of the period
8
3
What would be the effect on income from operations if variable costing is used rather than absorption costing? A. $80,000 decreaseB. $80,000 increaseC. $88,000 increaseD. $104,000 increase
85. The level of inventory of a manufactured product has increased by 10,000 units during a period. The following data are also available:
Variable
Fixed
Unit manufacturing costs of the period
$11.00
$7.00
Unit operating expenses of the period
3.00
2.50
What would be the effect on income from operations if variable costing is used rather than absorption costing? A. $70,000 decreaseB. $70,000 increaseC. $45,000 increaseD. $95,000 increase
86. The level of inventory of a manufactured product has increased by 8,000 units during a period. The following data are also available:
Variable
Fixed
Unit manufacturing costs of the period
$24
$10
Unit operating expenses of the period
8
3
What would be the effect on income from operations if absorption costing is used rather than variable costing? A. $80,000 decreaseB. $80,000 increaseC. $88,000 increaseD. $104,000 increase
87. The level of inventory of a manufactured product has increased by 5,000 units during a period. The following data are also available:
Variable
Fixed
Unit manufacturing costs of the period
$24
$10
Unit operating expenses of the period
8
3
What would be the effect on income from operations if variable costing is used rather than absorption costing? A. $50,000 decreaseB. $50,000 increaseC. $88,000 increaseD. $104,000 increase
88. The level of inventory of a manufactured product has increased by 4,000 units during a period. The following data are also available:
Variable
Fixed
Unit manufacturing costs of the period
$22
$11
Unit operating expenses of the period
7
5
What would be the effect on income from operations if absorption costing is used rather than variable costing? A. $44,000 decreaseB. $44,000 increaseC. $64,000 increaseD. $52,000 increase
89. A business operated at 100% of capacity during its first month and incurred the following costs:
Production costs (20,000 units):
Direct materials
$180,000
Direct labor
240,000
Variable factory overhead
280,000
Fixed factory overhead
100,000
$800,000
Operating expenses:
Variable operating expenses
$130,000
Fixed operating expenses
50,000
180,000
If 1,600 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the variable costing balance sheet? A. $64,000B. $56,000C. $66,400D. $68,000
90. A business operated at 100% of capacity during its first month and incurred the following costs:
Production costs (10,000 units):
Direct materials
$ 80,000
Direct labor
120,000
Variable factory overhead
140,000
Fixed factory overhead
40,000
$380,000
Operating expenses:
Variable operating expenses
$ 65,000
Fixed operating expenses
25,000
90,000
If 1,000 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the absorption costing balance sheet? A. $38,000B. $28,000C. $34,000D. $47,000
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