Variable costing method over absorption costing

Assignment Help Accounting Basics
Reference no: EM13151473

Accountants prefer the variable costing method over absorption costing method for evaluating the performance of a company because

A) by using the absorption method, more sales will be generated.

B) by using the absorption costing method, income could appear to be higher by producing more inventory.

C) by using the variable costing method, the cost of goods sold will be higher as more units are manufactured and sales remain the same.

D) by using the variable costing method, all fixed and variable costs are included in the unit cost of the product manufactured.

Reference no: EM13151473

Questions Cloud

What is the biochemical basis for the spectrum : what is the biochemical basis for the spectrum of the fastidiousness seen in the microbial world?
Merits of the four different special journals : What are the advantages of the four different special journals? When would you use each type? What is a subsidiary ledger and what purpose does it serve?
A separatory funnel is used for separating liquids : a separatory funnel is used in this method of separating liquids . f. liquid is allowed to evaporate, leaving the solid behind c. element
Reason to believe that inspectors are slower than average : The 50 computer mice inspectors at a particular factory can only inspect 34 mice per hour. Does the company have reason to believe that these inspectors are slower than average at α = 0.10?
Variable costing method over absorption costing : Accountants prefer the variable costing method over absorption costing method for evaluating the performance of a company because
How do fixed costs play a role in your analysis : How do fixed costs play a role in your analysis? What is the difference between shutting down and going out of business?
Prepare the operating section of the statement of cash flows : Prepare the operating section of the statement of cash flows under the indirect method and the direct method.
Corporation stock is distributed equally : Kevin and Nicole form Indigo Corporation with the following transfers: inventory from Kevin (basis of $360,000 and fair market value of $400,000) and improved real estate from Nicole (basis of $320,000 and fair market value of $375,000). Nicole, a..
What is the equilibrium price of honey : Suppose the demand for honey is given by Q=500-4p. Also, suppose there are 80 honey producers in the market. What is the equilibrium price of honey?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Total cost recovery deduction problem

Augie purchased one new asset during the year (five-year property) on November 10, 2009, at a cost of $600,000. She made the § 179 election. The income from the business before the cost recovery deduction and the § 179 deduction was $500,000. Dete..

  Incremental analysis and decision making

Crone Enterprises uses a word processing computer to handle its sales invoices. Lately, business has been so good that it takes an extra 3 hours per night, plus every third Saturday, to keep up with the volume of sales invoices.

  Discussions that have occurred in the tda

Write an article arguing this position. You may or may not agree with this proposition. However, based upon the materials covered in this course and the discussions that have occurred in the TDAs, you should be able to articulate a cogent, persuas..

  Reasonable compensation issue

Briefly discuss how the reasonable compensation issue applies to S-corporations. Briefly explain the double taxation problem and how paying large salaries to owners avoids it.

  How much is the cost per machine

Beginning work in process totaled $15,000, and the ending balance is $9,000. During the year, the company completed 40 machines. How much is the cost per machine?

  Manufacturing cycle time

Wait time to the start of production 5.0 days, Delivery Cycle time 18 days, Move time 3.0 days, Inspection time 2.5 days, Queue Time during the production process 3.5 days.

  How much inventory can baker purchase

How much inventory can Baker purchase without violating its debt agreement if their total current assets equal $15 million.

  Amount of dividends received by the common stockholders

There were no dividends declared in 2009. The board of directors declares and pays a $45,000 dividend in 2010 and in 2011. What is the amount of dividends received by the common stockholders in 2011?

  Variable interest in a variable interest entity

An enterprise that holds a variable interest in a variable interest entity (vie) is required to consolidate the assets, liabilities, revenues, expenses, and noncontrolling interest of that entity if:

  Journal entries to record issuance of bonds

On the first day of the current fiscal year, $1,000,000 of 10-year, 7% bonds, with interest payable semiannualy were sold for $1,050,000. Present entries to record the following transactions for the current fiscal year:

  Problem regarding closing entries

Which is the following that is not true about closing entries?

  Schedule of taxable income and journal entries

Prepare a schedule starting with pretax financial income and compute taxable income. Prepare the journal entry to record income taxes for 2011.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd