Reference no: EM132543146
Question 1. Using absorption costing, fixed manufacturing overhead costs are best described as
a. Direct period costs
b. Indirect period costs
c. Direct product costs
d. Indirect product costs
Question 2. If production is higher than sales, then absorption costing income is expected to be
a. Higher than variable costing income
b. Equal to the variable costing income
c. Lower than variable costing income
d. Erratic under variable costing
Question 3. HJW Company produced 10,000 units and sold 9,000 units. Fixed manufacturing overhead costs were P20,000, and variable manufacturing overhead costs were P3 per unit. For the period, one would expect net income under the absorption costing method to be
a. 2,000 more than net income under variable costing method
b. 5,000 more than net income under variable costing method
c. 2,000 less than net income under variable costing method
d. 5,000 less than net income under variable costing method
Question 4. Ur Universe Company has operating income of P50,000 using direct costing for a given period. Beginning and ending inventories for 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:
a. 40,000
b. 50,000
c. 60,000
d. 70,000
Question 5. Sunshine Company had 16,000 units in its beginning inventory. During the year, the company's variable production costs were P6 per unit and its fixed manufacturing overhead costs were P4 per unit. The company's net income for the year was P24,000 lower under absorption costing than it was under variable costing. Given these facts, the number of units in the ending inventory must have been
a. 22,000 units
b. 10,000 units
c. 6,000 units
d. 4,000 units
Question 6. HJW1023 Co. had a net income of P85,500 using variable costing and net income of P90,000 using absorption costing. Total fixed manufacturing overhead cost was P150,000, and production was 100,000 units. Between the beginning and end of the year, the inventory level
a. increased by 4,500 units
b. decreased by 4,500 units
c. increased by 3,000 units
d. decreased by 3,000 units