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Step-by-step explanationWhen sales exceed production a larger net income would be reported under variable costing method?When sales exceed production then profit under?How do you find net income from variable costing?When units produced exceed units sold income under absorption costing is higher than income under variable costing?Recommended textbook solutions

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calculator:

Last year, Peck Company produced 10,000 units and sold 9,000 units. Fixed manufacturing overhead costs were $20,000, and variable manufacturing overhead costs were $3 per unit. For the year, one would expect net operating income under absorption costing to be:

a) $2,000 more than net operating income under variable costing;
b) $5,000 more than net operating income under variable costing;
c) $2,000 less than net operating income under variable costing;
d)$5,000 less than net operating income under variable costing

Asked by BarristerHummingbird479 on coursehero.com

Question 1 Which of the following statements is correct? a. When production is not equal to sales, income under absorption costing differs from income under variable costing due to the difference in treatment of the fixed overhead cost under the two costing methods b. In absorption costing system, fixed overhead cost is treated as period cost. c. In variable costing system, fixed overhead cost is included as part of the cost of inventory d. In a variable costing income statement, sales revenue is typically higher than absorption costing income statement Question 2 Which of the following statements is true? a. Income under absorption costing is always greater than income under variable costing b. Depreciation expense is always a period cost c. Selling and administrative costs, whether variable or fixed, is always treated as period costs under both absorption and variable costing system d. Depreciation expense is always a product cost Question 3 If production is less than sales in unit, then absorption costing net income will generally be a. Less than expected b. Equal to variable costing net income c. Less than variable costing net income d. Greater than variable costing net income Question 4 If a firm uses variable costing a. It calculates an idle facility variation b. Its profit fluctuates with sales c. Its product cost per unit changes because of changes in the number of units produced d. Its product costs include variable selling and administrative costs Question 5 The inventory costing method that treats direct manufacturing costs and indirect manufacturing cost, both variable and fixed, as inventoriable cost is called a. Conversion costing b. Perpetual inventory c. Variable costing d. Absorption costing Question 6 Which of the following statements regarding absorption and variable costing is correct? a. Absorption costing results in higher income when finished goods inventory increases b. Variable manufacturing costs are lower under absorption costing c. Profits are always the same under the two costing methods d. Overhead costs are treated in the same manner under both variable and absorption costing methods. Question 7 Which of the following must be known about a production process to institute a variable costing system? a. Standard quantities and prices for all production inputs b. The direct and indirect costs related to production c. The variable and fixed components of manufacturing costs d. The capacity level or denominator level to be used in allocating fixed overhead costs Question 8 What costs are treated as product cost under variable costing a. All manufacturing costs b. Only variable production costs c. All direct costs only d. All variable costs Question 9 Which of the following costing methods is not acceptable for external reporting? a. Process costing b. Activity-based costing c. Absorption costing d. Variable costing Question 11 Income under absorption costing may differ from income under variable costing. The difference in income between the two costing methods is equal to the change of the quantity of all units a. Produced multiplied by the variable manufacturing cost per unit b. Sold multiplied by the selling price per unit c. Sold multiplied by the fixed factory overhead cost per unit d. In inventory multiplied by the fixed factory overhead cost per unit Question 12 Net income computed using absorption costing can be reconciled to net income computed using variable costing by computing the difference between a. The product cost per unit under the two costing methods b. The gross profit under absorption costing and contribution margin under variable costing c. The selling price under two costing method d. Inventoried fixed factory overhead costs in the beginning and ending finished goods inventories Question 13 Which of the following statements is correct? a. Unit variable costs change directly with the cost driver or activity level b. Gross margin and contribution margin are the same c. One inherent simplifying assumption in CVP analysis is productions equals sales d. Contribution margin is the excess of sales over variable costs, and this is the amount available for the recovery of fixed assets and generation of profit Question 14 The type of costing system that will provide the best information for CVP and Break-even analysis if inventories are expected to change is a. Job order costing b. Variable costing c. Process costing d. Absorption Costing Question 15 Result of income are the same in both absorption and variable costing methods when a. When variable overhead cost per unit are the same. b. When Sales exceeds production c. Production exceeds sales d. Production and sales are the same

Answered by ProfessorFog901 on coursehero.com

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Step-by-step explanation

When sales exceed production a larger net income would be reported under variable costing method?

Explanation: If production exceeds sales, the profit under absorption costing is higher as compared to variable costing. This is due to the deferral of fixed manufacturing overhead costs to the next period in ending inventory, leading to reduced cost of goods sold for the current period and hence a higher profit.

When sales exceed production then profit under?

(b) When unit production is more than sales, profit under absorption costing will be greater then the profit under marginal costing. (c) When unit of production is less than sales, profit under absorption costing will be lower than the profit under marginal costing.

How do you find net income from variable costing?

Variable Costing Income Statement. Contribution Margin =Revenue – Variable Production Expenses – Variable Selling and administrative expenses.. Net profit or Loss = Contribution Margin – Fixed production expenses – Fixed Selling and administrative expenses..

When units produced exceed units sold income under absorption costing is higher than income under variable costing?

Step 2: Difference in operating income When units produced exceed units sold the operating income from the absorption method is higher than the operating income from the variable costing method because under absorption costing some fixed manufacturing overhead remains unexpended and reflected in the balance sheet. Tải thêm tài liệu liên quan đến nội dung bài viết If sales exceed production one would expect net income under the variable costing method