acctg sm

If sales exceed production, one would expect net income under the variable costing method

• to be the same as net income under the absorption costing method.

• to be greater than net income under the absorption costing method.

• to be differing in as much as the difference between sales and production.

• to be less than net income under the absorption costing method

For 1,000 per box, a company produces and sells delicacies. Direct materials are 400 per box and direct manufacturing labor averages 75 per box. Variable overhead is P25 per box and foxed overhead is P12,500,000 per year. Administrative expenses, all fixed, run 4,500,000 per year, with sales commissions of P100 per box. Production is expected to be 100,000 boxes, which is met every year. For the year just ended, 75,000 boxes were sold. What is the inventoriable cost per box using absorption costing?

• P625

• P500

• P770

• P670

If the company used the variable (direct) costing method, the operating income would be

• 2,100,000

• 4,000,000

• 2,480,000

• 3,040,000

What would be the company's operating income for 2022 under the variable (direct) costing method?

• P114,000

• 210,000

• 234,000

• 330,000

What would be the company's finished goods inventory at December 31, 2022 under the absorption costing

method?

• 80,000

• 104,000

• 110,000

• 124, 000

What would be Prima Donna's finished goods inventory cost at December 31, 2022, under the variable
(direct) costing method?

• 7,200

• 7,650

• 8,000

• P9,700

Which costing method, absorption or variable, would show a higher operating income for 2022 and by what amount?

• Absorption costing P2,500

• Variable costing P2,500

• Absorption costing P5,500

• Variable costing P5,500

When a firm uses direct costing

• the cost of a unit product changes because of changes in the number of units manufactured

• profits fluctuate with sales

• an idle capacity variance is calculated by a direct costing method.

• product costs include variable administrative costs.

Absorption costing differs from variable costing in the:

• fact that standard costs can be used with absorption costing but not with direct costing

• kinds of activities for which each can be used to report

• amounts of costs assigned to individual units of product

• amount of fixed costs that will be incurred

A company has operating income of P50,000 using direct costing for a given period. Beginning and ending inventories for that period were 13,000 units and 18,000 units, respectively. If the fixed factory overhead application rate is P2 per unit, the operating income using the absorption costing is:

• 40,000

• 50,000

• 60,000

• Not determinable from the information given