Cost Accounting, 15e (Horngren/Datar/Rajan)
Chapter 9 Inventory Costing and Capacity Analysis
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) ________ 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. A) Variable costing B) Mixed costing
C) Absorption costing D) Standard costing Answer: A
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
1
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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
2
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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) The only difference between variable and absorption costing is the expensing of ________. A) direct manufacturing costs B) variable marketing costs C) fixed manufacturing costs D) variable administrative costs Answer: C
Diff: 2
Objective: 1
AACSB: Analytical thinking
3
Copyright ? 2015 Pearson Education, Inc.