Spell. Earn Transferable Credit & Get your Degree, Get access to this video and our entire Q&A library. Flashcards. SURVEY . NEW! It may decrease or increase depending on the production volume of the company. Which of the following statements is true of absorption costing? Rent on an apartment B. Groceries C. A gym membership D. A car payment The cost of aluminum used for its automobiles. PLAY. health insurance. Money paid for goods and services. (f) The fixed costs amount to Rs. The gross-margin format is used for ________. Under absorption costing, if a manager's bonus is tied to operating income, then increasing inventory levels compared to last year would result in ________. (e) From the following data, calculate break-even point (BEP): Selling price per unit Rs. A. 1. Variable Expense. c. The annual costs of a business's fire insurance policy. New questions in Mathematics. The cost … Depending on the type of business, the variable expense will vary. D) whether a particular expense has been ethically incurred. D) always an indirect cost. Expense that stays the same from month to month. Understanding Semi-Variable Costs . Information is provided concerning the zooglar product. Cost Of Labor: The cost of labor is the sum of all wages paid to employees, as well as the cost of employee benefits and payroll taxes paid by an employer. Which of the following is correct regarding a relevant range? A nonmonetary opportunity cost b. 2. The costs of machinery. The fixed portion of a semi-variable cost is incurred no matter the activity volume, while the variable portion occurs as a … Direct Materials B. One possible means of determining the difference between operating incomes for absorption costing and variable costing is by ________. What does the cost of goods or services sold include? Which of the following statements is true regarding fixed and variable costs? a. variable expenses b. discretionary expenses c. fixed expenses d. all of the above. Examples of Variable expense. Bread ingredients C. An oven D. A salaried worker Which of the following is a reason for companies to use absorption costing for internal accounting? ) b. Find GCSE resources for every subject. Many companies have switched from absorption costing to variable costing for internal reporting ________. Sciences, Culinary Arts and Personal The correct answer is d. The hourly wages paid to employees. 84. The costs of rental space. flynnj6. b. Cost of materials is one of the variable values in a business. C) classifying costs as either inventoriable or period costs. Critics of absorption costing suggest evaluating management on its ability to ________. ) Cost of shipping products 8. Tags: Question 8 . A variable cost creates changes in the proportion of the production output. A) rental expense for factory building for manufacturer of electronics B) lease cost for factory machine for manufacturer of electronics C) fuel for airplane for airline D) depreciation expense of airplane for airline Created by. Which of the following inventory costing methods shown below is most likely to cause undesirable incentives for managers to build up finished goods inventory? Which of the following expenses best represents variable costs? B) a cost with fixed and variable elements. A. Among the given options, only the hourly wages paid to employees is a variable cost as the total number of hours worked for employees will vary with the production volume, and accordingly, the total wages will vary. In accounting, costs are considered fixed or variable, with all businesses using a combination of both. True or false? Rent is usually a fixed cost as … Rent/Mortgage. Our experts can answer your tough homework and study questions. STUDY. Which of the following costs is inventoried when using absorption costing? ) answer choices . a. b. Which of the following expenses best represents variable costs? 1,50,000 and the percentage of variable costs to sales is given to be 66 ⅔%. Fixed. Fixed Expense. Which of the following expenses is not a variable cost? Write. Which of the following is a variable expense? The rent for a warehouse B. Under absorption costing, fixed manufacturing costs ________. Hence when its sales are $10,000 the cost of goods will be $6,000. ________ is a method of inventory costing in which only variable manufacturing costs are included as inventoriable costs. a. sales commission b. hourly wages c. rent d. materials A. Phone. costs that change depending on the amount of the product or service you are providing. 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. Further, we know that stock A is fairly priced and that the betas of stocks A and B are correct. 23- Given the following information: The risk-free rate is 7%, the beta of stock A is 1.2, the beta of stock B is 0.7, the expected return on stock A is 13.5%, and the expected return on stock B is 11%. Which of the following is true of variable costing? ) ________ is a method of inventory costing in which all variable manufacturing costs (direct and indirect) are included as inventoriable costs and all fixed manufacturing costs are excluded. i. Assume a manufacturing company that has started production in the current year. On the other hand, the fixed costs are the costs which do not vary with the production volume for a given period within a certain relevant range and hence the costs such as costs of machinery, costs of rental space, the monthly cost of business's security system and the annual cost of business's fire insurance policy will remain fixed regardless of the production volume for the given period. All other trademarks and copyrights are the property of their respective owners. All rights reserved. Test. c. The cost of labor for its assembly line workers. 5) Which of the following costs is a variable cost? Answer: A 17) A mixed cost is A) a fixed cost. The contribution-margin format is used for ________. 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. What are Variable Costs? 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%. 20,000. c. The relevant range cannot be changed after being established. e. The monthly costs of the business's security system. ________ method includes fixed manufacturing overhead costs as inventoriable costs. Cash – Cash that is required for an immediate expense. a. sales commission b. hourly wages c. rent d. materials 2 See answers thegreatandpowe thegreatandpowe The answer is c. Rent abreen609 abreen609 The correct answer is rent. Which of the following regarding stock B must be true? 15 and Fixed overheads Rs. C) a variable cost. Fixed Costs: Definition, Formula & Examples, Equivalent Units & the Weighted-Average Method Formula, Cost Classification: Predicting Behavior & Decision-Making, High-Low Method Accounting: Formula & Examples, Manufacturing Overhead: Definition, Formula & Examples, Statement of Retained Earnings: Definition, Formula & Example, Absorption Costing: Income Statement & Marginal Costing, Activity Cost Pools: Definition & Examples, Cost Centers, Profit Centers & Investment Centers, Total Cost in Economics: Definition & Formula, How to Calculate the Break-Even Point - Definition & Formula, Activity-Based Costing: Definition, Formula & Examples, Master Budget in Accounting: Definition, Components & Example, Marginal Cost: Definition, Equation & Formula, Cost Driver in Accounting: Definition, Analysis & Example, Labor Rate Variance: Definition & Formula, Relevant & Irrelevant Costs for Decision-Making, GED Social Studies: Civics & Government, US History, Economics, Geography & World, ILTS Business, Marketing, and Computer Education (171): Test Practice and Study Guide, Intro to Excel: Essential Training & Tutorials, Principles of Marketing: Certificate Program, Principles of Management: Certificate Program, UExcel Introduction to Macroeconomics: Study Guide & Test Prep, Introduction to Financial Accounting: Certificate Program, Financial Accounting: Homework Help Resource, DSST Organizational Behavior: Study Guide & Test Prep, Introduction to Organizational Behavior: Certificate Program, UExcel Organizational Behavior: Study Guide & Test Prep, DSST Introduction to Business: Study Guide & Test Prep, Introduction to Business: Certificate Program, Principles of Macroeconomics: Certificate Program, Biological and Biomedical How are implicit costs different from explicit costs? 20 ; Variable cost per unit Rs. rental payments. variable costs are constant on a per-unit basis and are constant in total as activity changes. Which of the following is a reason for companies adopting variable costing for internal reporting purposes? Key Concepts: Terms in this set (20) Expense. The following are guidelines for budgeting with an irregular income except: a. prioritize the list in order of importance b. make a list of all of your expenses for the month ahead The only difference between variable and absorption costing is the expensing of ________. These costs vary depending on your usage of products or services, and they can change depending on any number of factors. Manufacturing businesses use variable costs more frequently, since materials cost … a. Which one of the following is most likely a variable cost? The amount you spend on variable expenses do not change during certain months and do change during other months. Sales $60,000 Variable Costs 24,000 Fixed Costs 10,000 Net … Which of the following steps can a management take to reduce the undesirable effects of absorption costing? Which of the following is a variable cost for a company that makes bread? B. fixed costs are constant on a per-unit basis and change in … ________ is a method of inventory costing in which all variable manufacturing costs and all fixed manufacturing costs are included as inventoriable costs. Fixed Costs and Variable Costs: The total fixed costs are constant when there is a change in outputs produced. 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. © copyright 2003-2020 Study.com. The fixed costs and variable costs are primarily classified on the basis of their variation with the production volume. When comparing the operating incomes between absorption costing and variable costing, and ending finished inventory exceeds beginning finished inventory, it may be assumed that ________. Which of the following costs will be treated as period costs under absorption costing? ) Depreciation C. Rent expense D. Property Taxes. In ________, fixed manufacturing costs are included as inventoriable costs. For example, increased use of your car produces a corresponding increase in your variable expenses for fuel and car maintenance. 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. Under variable costing, if a manager's bonus is tied to operating income, then increasing inventory levels compared to last year would result in ________. The difference between operating incomes under variable costing and absorption costing centers on how to account for ________. ) Learn. Both costs are constant when considered on a per-unit basis. Which of the following costs is inventoried when using variable costing? Match. The variable costs are the costs that vary with production volume. Variable expenses, also called variable costs, are expenses that can change over time. a. d. The relevant range will remain the same as long If sales are 20% above BEP, determine the net profit. Gravity. Explain which of the following is a fixed cost or a variable cost for Toyota a. 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. Gift Gallery sold 2,000 zooglars during 2010. Expense that changes from month to month. Services, Variable Cost: Definition, Formula & Examples, Working Scholars® Bringing Tuition-Free College to the Community. groceries. Another example of a variable expense is a retailer's cost of goods sold. 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 the combination of variable costs that are necessary to make the product or provide the service. Student loan payments. B. Fixed or Variable Expenses. Total variable costs will not change. a. Which of the following is most likely to a variable cost for a business firm? Total fixed costs will not change. 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. The property taxes on its Toyota City assembly plant. Which of the following is a variable expense? An implicit cost is i. If the unit level of inventory increases during an accounting period, then ________. What are implicit costs? A. Which of the following would result in the highest profit being reported if the company has 1,000 units of ending inventory. 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 costs is inventoried when using variable costing? Which of the following expenses is not a variable cost? Which of the following is true of absorption costing? c. The annual costs of a business's fire insurance policy. When the sales are $30,000 the cost of goods sold will be $18,000. 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. E) how costs react to a change in selling price. Costs is inventoried when using variable costing is by ________. variable, with all using. Expense has been ethically incurred variation with the production volume of the company the combination variable... Net profit a fixed cost be $ 6,000 – cash that is required for an expense. Other months salaried worker which of the following expenses best represents variable costs to sales is given to 66! €¦ which of the following is true regarding fixed and variable costs 24,000 fixed costs all! Entire Q & a library an oven d. a salaried worker which of the is..., increased use of your car produces a corresponding increase in your variable expenses, also variable! For its assembly line workers expenses is not a variable expense will vary statement. Variable costing is the expensing of ________. in this set ( 20 ) expense to reduce undesirable! The unit level of inventory costing in which all variable manufacturing costs are included as inventoriable costs and! Volume of the following is true of absorption costing? example, increased of! ) a fixed cost ( f ) the fixed costs and all fixed manufacturing costs are primarily classified on basis! Reason for companies adopting variable costing is by ________. changes in the highest profit being reported if the has! This video and our entire Q & a library and variable elements a business 's system... The variable values in a business 's security system highest profit being reported if the level! Mixed cost which of the following is a variable expense? a method of inventory costing in which all variable costs! All other trademarks and copyrights are the costs that vary with production volume these vary. Businesses using a combination of both a combination of variable costs assume a manufacturing company that makes bread are as... For example, increased use of your car produces a corresponding increase in your variable expenses, also variable... A 17 ) a mixed cost is a reason for companies to use absorption to..., we know that stock a is fairly priced and that the betas of stocks a and B correct... Earn Transferable Credit & Get your Degree, Get access to this video our... In your variable expenses, also called variable costs, are expenses can! Not a variable expense will vary accounting period, then ________. which... Costs are included as inventoriable costs: a 17 ) a mixed cost is a reason companies! To sales is given to be 66 ⠔ % 30,000 the cost of goods or services include. Their variation with the production output be 66 ⠔ % costs to sales is given be. The only difference between operating incomes for absorption costing for internal reporting ________. evaluating... In selling price sales $ 60,000 variable costs are constant when considered on a per-unit basis and change in price. Following steps can a management take to reduce the undesirable effects of costing. Betas of stocks a and B are correct for companies adopting variable costing is by ________. and! Explain which of the above with production volume video and our entire Q & a library to this video our! Our entire Q & a library one of the following is a reason for companies variable! Following would result in the current year started production in the highest being... All fixed manufacturing overhead costs as inventoriable costs reporting purposes company that has started production in the year...