Direct costing and in favour of full costing

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Reference no: EM13788161

Which of the following is an argument against the sued of direct (variable) costing and in favour of full (absorption) costing?

A Absorption costing overstate the balance she value of inventories

B Variable factory overhead is a period cost

C fixed manufacturing overhead is difficult to allocated properly

D fixed manufacturing overhead is necessary for the production of a product

The manager of a profit center should not be responsible for which of the following types of decision?

A Deciding which supplier should be used for the purchase of direct material

B Establishing the number of employees that will need to work each day

C Deciding wither or not their segment should purchase additional machinery

D deciding whether or noy to accept a special order from a customer

Residual income is a better for the performance evaluation of an investment centre manager than return on investment because:

A The problem associated with measuring the asset base are eliminated

B capital budging projects in the best interest of the company will not be rejected by investment center manager

C Only the gross book value of assets needs to be calculated

D residual income does not increase as assets are depreciated

Reference no: EM13788161

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