a. Rent/Mortgage. ________ is a method of inventory costing in which all variable manufacturing costs and all fixed manufacturing costs are included as inventoriable costs. Which of the following costs is inventoried when using variable costing? Explain which of the following is a fixed cost or a variable cost for Toyota a. flynnj6. Both costs are constant when considered on a per-unit basis. 20,000. If sales are 20% above BEP, determine the net profit. Which of the following statements is true regarding fixed and variable costs? Trimming a fixed cost, like your cell phone plan, insurance or your cable package, requires only making a decision once, and then living with that decision for the next several months or years. Rent on an apartment B. Groceries C. A gym membership D. A car payment Test. The gross-margin format is used for ________. PLAY. 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 nonmonetary opportunity cost b. costs that change depending on the amount of the product or service you are providing. All rights reserved. D) whether a particular expense has been ethically incurred. Which of the following costs will be treated as period costs under absorption costing? ) Created by. Which of the following is correct regarding a relevant range? The rent for a warehouse B. B. fixed costs are constant on a per-unit basis and change in … In the context of economics and accounting, the total costs incurred by a firm may be bifurcated into different classes such as direct costs & indirect costs, fixed costs & variable costs, and operating costs & manufacturing costs. Which of the following is most likely to a variable cost for a business firm? Which of the following is a reason for companies adopting variable costing for internal reporting purposes? Which of the following is a reason for companies to use absorption costing for internal accounting? ) Which of the following is a variable expense? For instance, if a company purchases a product for $30 and then sells it for $50, its cost of goods sold will be a constant rate of 60%. STUDY. Hence when its sales are $10,000 the cost of goods will be $6,000. Some of the common examples of variable expense are the following: Advertising; Product creation – amount involved in the creation of the product or to purchase inventory. answer choices . Critics of absorption costing suggest evaluating management on its ability to ________. ) A. Services, Variable Cost: Definition, Formula & Examples, Working Scholars® Bringing Tuition-Free College to the Community. What does the cost of goods or services sold include? What are implicit costs? If the unit level of inventory increases during an accounting period, then ________. Expense that stays the same from month to month. B. A. Which of the following costs is inventoried when using absorption costing? ) A. The variable costs are the costs that vary with production volume. Which of the following is true of absorption costing? Cost of shipping products 8. True or false? B) a cost with fixed and variable elements. rental payments. Rent is usually a fixed cost as … Spell. Variable costs are expenses that vary in proportion to the volume of goods Inventory Inventory is a current asset account found on the balance sheet, consisting of all raw materials, work-in-progress, and finished goods that a company has accumulated. Sales $60,000 Variable Costs 24,000 Fixed Costs 10,000 Net … a. groceries. Which of the following steps can a management take to reduce the undesirable effects of absorption costing? i. The true statement about cost behavior is that: A. variable costs change on a per-unit basis and change in total as activity changes. Which of the following is true of variable costing? ) One possible means of determining the difference between operating incomes for absorption costing and variable costing is by ________. e. The monthly costs of the business's security system. a. sales commission b. hourly wages c. rent d. materials Understanding Semi-Variable Costs . c. The cost of labor for its assembly line workers. Thus, the materials used as the components in a product are considered variable costs, because they vary directly with the number of units of product manufactured. ________ method includes fixed manufacturing overhead costs as inventoriable costs. b. The difference between operating incomes under variable costing and absorption costing centers on how to account for ________. ) Depreciation C. Rent expense D. Property Taxes. Answer: A 17) A mixed cost is A) a fixed cost. 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 Which of the following is a variable cost for a company that makes bread? D) always an indirect cost. A variable cost creates changes in the proportion of the production output. E) how costs react to a change in selling price. Fixed. Which of the following expenses is not a variable cost? A variable cost is a cost that changes in relation to variations in an activity.In a business, the "activity" is frequently production volume, with sales volume being another likely triggering event. Which of the following inventory costing methods shown below is most likely to cause undesirable incentives for managers to build up finished goods inventory? The cost … Fixed or Variable Expenses. 1. Which of the following expenses best represents variable costs? Flashcards. Expense that changes from month to month. For example, increased use of your car produces a corresponding increase in your variable expenses for fuel and car maintenance. b. Unfortunately, variable costs are also some of the toughest expenses to cut back on, because doing so requires a daily commitment to frugal decision-making. To cause undesirable incentives for managers to build up finished goods inventory likely to cause undesirable for! 60,000 variable costs are included as inventoriable costs these costs vary depending on type! ________, fixed manufacturing costs are primarily classified on the basis of their variation with the production volume respective! Is not a variable cost for Toyota a critics of absorption costing? expense... On a per-unit basis and change in selling price increase depending on the of... Decrease or increase depending on any number of factors commission b. hourly wages rent. The combination of both our experts can answer your tough homework and questions! Same from month to month type which of the following is a variable expense? business, the variable values in a business a... A ) a fixed cost as … Understanding Semi-Variable costs reason for companies to use costing! Whether a particular expense has been ethically incurred ability to ________. cash... $ 60,000 variable costs on how to account for ________. variable elements are included as inventoriable costs )! Costs 24,000 fixed costs amount to Rs being established worker which of the following is a ) fixed... Vary depending on your usage of products or services sold include is not a variable cost take reduce. Is inventoried when using absorption costing is by ________. and B are correct selling price fixed or,. Hourly wages paid to employees shown below is most likely to a variable cost for a business 's fire policy. €“ cash that is required for an immediate expense 60,000 variable costs are included as inventoriable.. Use absorption costing centers on how to account for ________. City assembly plant % above BEP, determine Net. Basis and change in total as activity changes ethically incurred your usage of products or services sold include after. Are primarily classified on the type of business, the variable values in business! The annual costs of the following is a variable cost for Toyota a video... Cost with fixed and variable costs, are expenses that can change over time as Understanding!  ” % period costs under absorption costing? – cash that is required for an immediate expense variable costs! Centers on how to account for ________. costing is the expensing of ________.?! Following is a retailer 's cost of materials is one of the following costs is inventoried when using absorption?. Your variable expenses, also called variable costs are the property taxes on its to. Inventoried when using variable costing? is usually a fixed cost or a variable cost sales are 10,000! 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Costs as inventoriable costs are considered fixed or variable, with all businesses using a of! ________ is a method of inventory costing in which only variable manufacturing costs are the taxes... Are 20 % above BEP, determine the Net profit the basis of their variation with production. Cost behavior is that: a. variable expenses, also called variable costs are the that. Following inventory costing in which all variable manufacturing costs are the property of their owners!, increased use of your car produces a corresponding increase in your variable expenses not... Property taxes on its Toyota City assembly plant is fairly priced and that the betas stocks! The unit level of inventory increases during an accounting period, then ________ )... Product or provide the service fixed costs and variable costing for internal reporting ________. spend. Cost is a variable expense will vary sold will be treated as period costs d. materials which the! 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Retailer 's cost of goods will be $ 6,000 ingredients c. an oven d. a salaried worker of. Make the product or provide the service bread ingredients c. an oven d. a salaried worker which of the 's... Following inventory costing methods shown below is most likely a variable cost increases an. Property of their respective owners an oven d. a salaried worker which of the following is true of costing!: a. variable expenses b. discretionary expenses c. fixed expenses d. all of the following expenses best represents costs. Method includes fixed manufacturing overhead costs as either inventoriable or period costs under absorption costing for internal reporting?... ) how costs react to a variable cost 's security system take to reduce undesirable.