someone help me with this questions please
1. How would the following costs be classified (product or period) under variable costing at a retail clothing store?
Cost of purchasing clothing Sales commissions
A) Product Product
B) Product Period
C) Period Product
D) Period Period
2. The principal difference between variable costing and absorption costing centers on:
A) whether variable manufacturing costs should be included as product costs.
B) whether fixed manufacturing costs should be included as product costs.
C) whether fixed manufacturing costs and fixed selling and administrative costs should be included as product costs.
D) none of these.
3. Which of the following costs at a manufacturing company would be treated as a product cost under the variable costing method?
A) direct material cost
B) property taxes on the factory building
C) sales manager's salary
D) all of the above
4. Assuming that direct labor is a variable cost, the primary difference between the absorption and variable costing is that:
A) variable costing treats only direct materials and direct labor as product cost while absorption costing treats direct materials, direct labor, and the variable portion of manufacturing overhead as product costs.
B) variable costing treats direct materials, direct labor, the variable portion of manufacturing overhead, and an allocated portion of fixed manufacturing overhead as product costs while absorption costing treats only direct materials, direct labor, and the variable portion of manufacturing overhead as product costs.
C) variable costing treats only direct materials, direct labor, the variable portion of manufacturing overhead, and the variable portion of selling and administrative expenses as product cost while absorption costing treats direct materials, direct labor, the variable portion of manufacturing overhead, and an allocated portion of fixed manufacturing overhead as product costs.
D) variable costing treats only direct materials, direct labor, and the variable portion of manufacturing overhead as product costs while absorption costing treats direct materials, direct labor, the variable portion of manufacturing overhead, and an allocated portion of fixed manufacturing overhead as product costs.
5. The costing method that treats all fixed costs as period costs is:
A) absorption costing.
B) job-order costing.
C) variable costing.
D) process costing.
If you tried to copy and paste the question, obviously it didn't work. Please type your question.
When sales are constant, but the production level fluctuates, net operating income determined by the variable costing method will:
A)fluctuate in direct proportion to changes in production.
B)remain constant.
C)fluctuate inversely with changes in production.
D)be greater than net operating income under absorption costing.
Under the variable costing method, which of the following is always expensed in its entirety in the period in which it is incurred?
A)fixed manufacturing overhead cost
B)fixed selling and administrative expense
C)variable selling and administrative expense
D)all of the above
I think it's C. It's definitely not B.
If you make too much yet sales remain constant, your net operating income will be less because you have extra product.
yrfjhfg
gnm
1. The classification of costs under variable costing at a retail clothing store would be as follows:
- Cost of purchasing clothing: Product cost
- Sales commissions: Period cost
Therefore, the correct answer is option C) Period-Product.
To determine this, you need to understand the difference between product costs and period costs. Product costs are costs incurred directly in the production or acquisition of products, whereas period costs are expenses incurred outside the production process. In this case, the cost of purchasing clothing is directly related to the products being sold, so it is a product cost. On the other hand, sales commissions are incurred as a result of the sales process and are not directly tied to the products themselves, so they are classified as a period cost.
2. The principal difference between variable costing and absorption costing centers on whether fixed manufacturing costs should be included as product costs.
The correct answer is option B) whether fixed manufacturing costs should be included as product costs.
To understand this difference, we need to look at the definitions of variable costing and absorption costing. Variable costing treats only variable manufacturing costs (direct materials, direct labor, and variable portion of manufacturing overhead) as product costs, while absorption costing includes all manufacturing costs (both variable and fixed) as product costs. So the main distinction between the two methods is whether fixed manufacturing costs should be considered as part of the cost of producing a product.
3. The only cost that would be treated as a product cost under the variable costing method is direct material cost.
The correct answer is option A) direct material cost.
Under the variable costing method, only variable manufacturing costs are considered as product costs. Direct material cost is a direct and variable cost that is directly related to the production process. On the other hand, property taxes on the factory building and sales manager's salary are fixed costs that are not directly related to the production process, so they would be treated as period costs.
4. The primary difference between absorption costing and variable costing is that absorption costing treats fixed manufacturing overhead as a product cost, while variable costing treats only variable manufacturing costs (direct materials, direct labor, and variable portion of manufacturing overhead) as product costs.
The correct answer is option A) variable costing treats only direct materials and direct labor as product costs, while absorption costing treats direct materials, direct labor, and the variable portion of manufacturing overhead as product costs.
Under absorption costing, fixed manufacturing overhead is allocated and included as a product cost based on a predetermined rate or allocation method. Variable costing, however, treats fixed manufacturing overhead as a period cost that is expensed in the period incurred. The only costs included as product costs under variable costing are direct materials, direct labor, and the variable portion of manufacturing overhead.
5. The costing method that treats all fixed costs as period costs is absorption costing.
The correct answer is option A) absorption costing.
Absorption costing considers all manufacturing costs (both fixed and variable) as product costs. This means that fixed costs, such as fixed manufacturing overhead, are allocated and included as part of the cost of producing a product. In contrast, variable costing treats fixed costs as period costs and only includes variable manufacturing costs as product costs. Therefore, absorption costing is the method that treats all fixed costs as period costs.