Question : 11) What the cost of goods sold per unit when : 1212191

11) What is the cost of goods sold per unit when using absorption costing?

A) $120

B) $128

C) $150

D) $158

12) What is the gross margin when using absorption costing?

A) $675,000

B) $527,500

C) $270,000

D) $337,500

13) What is the operating income when using absorption costing?

A) $337,500

B) $312,500

C) $290,000

D) $260,500

14) An favorable production-volume variance occurs when ________.

A) the denominator level exceeds production

B) production exceeds the denominator level

C) production exceeds unit sales

D) unit sales exceed production

15) If the unit level of inventory increases during an accounting period, then ________.

A) less operating income will be reported under absorption costing than variable costing

B) more operating income will be reported under absorption costing than variable costing

C) operating income will be the same under absorption costing and variable costing

D) the exact effect on operating income cannot be determined

16) The difference between operating incomes under variable costing and absorption costing centers on how to account for ________.

A) direct materials costs

B) fixed manufacturing costs

C) variable manufacturing costs

D) selling and administrative costs

17) One possible means of determining the difference between operating incomes for absorption costing and variable costing is by ________.

A) subtracting sales of the previous period from sales of this period

B) subtracting fixed manufacturing overhead in beginning inventory from fixed manufacturing overhead in ending inventory

C) multiplying the number of units produced by the budgeted fixed manufacturing cost rate

D) adding fixed manufacturing costs to the production-volume variance

18) When comparing the operating incomes between absorption costing and variable costing, and ending finished inventory exceeds beginning finished inventory, it may be assumed that ________.

A) sales decreased during the period

B) variable cost per unit is more than fixed cost per unit

C) there is a favorable production-volume variance

D) absorption costing operating income exceeds variable costing operating income

19) Which of the following statements is true of absorption costing?

A) Absorption costing allocates fixed manufacturing overhead to actual units produced during the period.

B) Absorption costing carries over nonmanufacturing costs to the future periods.

C) Absorption costing shows the same level of profit as variable costing irrespective of the level of inventories.

D) Absorption costing allocates total manufacturing cost using the budgeted level of production for a particular year.

20) Heston Company has the following information for the current year:

Beginning fixed manufacturing overhead in inventory$190,000

Fixed manufacturing overhead in production750,000

Ending fixed manufacturing overhead in inventory50,000

Beginning variable manufacturing overhead in inventory$20,000

Variable manufacturing overhead in production100,000

Ending variable manufacturing overhead in inventory30,000

What is the difference between operating incomes under absorption costing and variable costing?

A) $140,000

B) $100,000

C) $80,000

D) $10,000