University of Minnesota, DuluthACCT 3201chapter 9 Inventory Costing and Capacity Analysis QUESTIONS WITH VERIFIED SOLUTIONS
17 views 0 purchase
Course
ACCT 3201
Institution
University Of Minnesota, Duluth
Cost Accounting: A Managerial Emphasis, 16e (Horngren)
Chapter 9 Inventory Costing and Capacity Analysis
9.1 Objective 9.1
1) Which of the following costs is inventoried when using variable costing?
A) rent on factory building
B) electricity consumed in manufacturing process
C) sales commissi...
16e horngren chapter 9 inventory costing and capacity analysis 91 objective 91 1 which of the following c
Written for
University Of Minnesota, Duluth
ACCT 3201
All documents for this subject (9)
Seller
Follow
Themanehoppe
Reviews received
Content preview
Cost Accounting: A Managerial Emphasis, 16e (Horngren)
Chapter 9 Inventory Costing and Capacity Analysis
9.1 Objective 9.1
1) Which of the following costs is inventoried when using variable costing?
A) rent on factory building
B) electricity consumed in manufacturing process
C) sales commission paid on each sale
D) advertising costs incurred for the product
Answer: B
Diff: 1
Objective: 1
AACSB: Application of knowledge
2) Which of the following costs is inventoried when using absorption costing?
A) variable selling costs
B) fixed administrative costs
C) variable manufacturing costs
D) fixed selling costs
Answer: C
Diff: 1
Objective: 1
AACSB: Analytical thinking
3) Which of the following best describes how fixed cost are treated in a variable cost
method?
A) They are part of the product cost
B) They are excluded from inventory cost and are treated as period costs
C) They are allocated to the product cost using a denominator-level capacity choice
D) They are classified as nonmanufacturing costs
Answer: B
Diff: 1
Objective: 1
AACSB: Analytical thinking
4) ________ is a method of inventory costing in which all variable manufacturing costs and
all fixed manufacturing costs are included as inventoriable costs.
A) Variable costing
B) Mixed costing
C) Absorption costing
D) Standard costing
Answer: C
Diff: 2
Objective: 1
AACSB: Analytical thinking
,5) Which of the following is true of absorption costing?
A) It expenses marketing costs as cost of goods sold.
B) It treats direct manufacturing costs as a period cost.
C) It includes fixed manufacturing overhead as an inventoriable cost.
D) It treats indirect manufacturing costs as a period cost.
Answer: C
Diff: 2
Objective: 1
AACSB: Analytical thinking
6) Which of the following is true of variable costing?
A) It expenses administrative costs as cost of goods sold.
B) It treats direct manufacturing costs as a product cost.
C) It includes fixed manufacturing overhead as an inventoriable cost.
D) It is required for external reporting to shareholders.
Answer: B
Diff: 2
Objective: 1
AACSB: Analytical thinking
7) In ________, fixed manufacturing costs are included as inventoriable costs.
A) variable costing
B) absorption costing
C) throughput costing
D) activity-based costing
Answer: B
Diff: 1
Objective: 1
AACSB: Analytical thinking
8) ________ method includes fixed manufacturing overhead costs as inventoriable costs.
A) Variable costing
B) Absorption costing
C) Throughput costing
D) Activity-based costing
Answer: B
Diff: 1
Objective: 1
AACSB: Analytical thinking
9) Which of the following costs will be treated as period costs under absorption costing?
A) raw materials used in the production
B) sales commission paid on sale of product
C) depreciation on factory equipment
D) rent for factory building
Answer: B
Diff: 2
Objective: 1
AACSB: Application of knowledge
10) Under absorption costing, fixed manufacturing costs ________.
A) are period costs
B) are inventoriable costs
C) are treated as an expense
D) are sunk costs
Answer: B
Diff: 1
Objective: 1
AACSB: Analytical thinking
,11) ________ is a method of inventory costing in which only variable manufacturing costs are
included as inventoriable costs.
A) Fixed costing
B) Variable costing
C) Absorption costing
D) Mixed costing
Answer: B
Diff: 1
Objective: 1
AACSB: Analytical thinking
12) Variable costing regards fixed manufacturing overhead as a(n) ________.
A) administrative cost
B) inventoriable cost
C) period cost
D) product cost
Answer: C
Diff: 1
Objective: 1
AACSB: Analytical thinking
, 13) AAA Manufacturing Inc, makes a product with the following costs per unit:
Direct materials $180
Direct labor $20
Manufacturing overhead (variable) $30
Manufacturing overhead (fixed) $130
Marketing costs $75
What would be the inventoriable cost per unit under variable costing and what would it be
under absorption costing?
A) $180 for variable costing and $305 under absorption costing
B) $230 for variable costing and $305 under absorption costing
C) $230 for variable costing and $360 under absorption costing
D) $200 for variable costing and $305 under absorption costing
Answer: C
Explanation: Variable costing: $180 + $20 + $30 = $230
Absorption costing: $180 + $20 + $30 + $130 = $360
Diff: 2
Objective: 1
AACSB: Application of knowledge
14) Time Again, LLC produces and sells a mantel clock for $100 per unit. In 2017, 42,125
clocks were produced and 37,958 were sold. Other information for the year includes:
Direct materials $43 per unit
Direct manufacturing labor $5 per unit
Variable manufacturing costs $3.50 per unit
Sales commissions $14.50 per part
Fixed manufacturing costs $65.00 per unit
Administrative expenses, all fixed $37.50 per unit
What is the inventoriable cost per unit using variable costing?
A) $66.00
B) $51.50
C) $48.00
D) $103.50
Answer: B
Explanation: Variable costing considers all variable manufacturing costs as inventoriable
costs. Therefore, in this case, direct materials, direct manufacturing labor, and variable
manufacturing costs will be considered as inventoriable cost. The total inventoriable cost =
($43 + $5 + $3.50) = $51.50
Diff: 2
Objective: 1
AACSB: Application of knowledge
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Themanehoppe. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $15.49. You're not tied to anything after your purchase.
