MANAGEMENT ADVISORY SERVICE THEORY Variable costing 1. To apply direct costing method it is necessary that you know A. Variable and fixed cost related to production B. Controllable and uncontrollable cost of production C. Contribution margin and break even point in production D. Standard production rate and times of production elements 2. The following statements about the adoption of variable costing are true, except: A. A direct cost may not become a product cost. B. An indirect cost may be assigned as part of product cost. C. It is an acceptable method for general reporting purposes. D. All fixed manufacturing costs are recognized as period costs. 3. Which of the following is NOT an advantage of using variable costing for internal reporting purposes? A. The impact of fixed costs on profits is emphasized. B. Total costs may be overlooked when evaluating profits. C. Profits are directly influenced by changes in sales volume. D. Fixed costs are reported at incurred values, not absorbed values, thus improving control over those costs. 4. A criticism of variable costing for managerial accounting purposes is that it A. overstates inventories. B. does not reflect cost-volume-profit relationships. C. is not acceptable for product line segmented reporting. D. might encourage managers to emphasize the short term at the expense of the long term. 5. Under variable costing, A. all product costs are fixed. B. all period costs are variable. C. all product costs are variable. D. product costs are both fixed and variable. MSQ-2 – Variable Costing & Absorption Costing
HILARIO G. TAN 6. Cay Co.’s 1995 fixed manufacturing overhead costs totaled $100,000, and variable selling costs totaled $80,000. Under variable costing, how should those costs be classified? A. B. C. D. Period Costs $0 $ 80,000 $100,000 $180,000 Product Costs $180,000 $100,000 $ 80,000 $0 7. Under the variable-costing concept, unit product cost would most likely be increased by A. A decrease in the number of units produced. B. An increase in the commission paid to salesman for each unit sold. C. A decrease in the remaining useful life of factory machinery depreciated on the units-ofproduction method. D. An increase in the remaining useful life of factory machinery depreciated on the sum-ofthe-year’s digits method. 8. Calculating income under variable costing does NOT require knowing A. selling price. C. unit sales. B. unit production. D. unit variable manufacturing costs. 9. Which of the following statements is true for a firm that uses variable costing? A. Profits fluctuate with sales. B. An idle facility variation is calculated. C. Product costs include variable administrative costs. D. The cost of a unit of product changes because of changes in number of units manufactured. 10. The change in period-to-period operating income when using variable costing can be explained by the change in the A. Unit sales level multiplied by the unit sales price. B. Unit sales level multiplied by a constant unit contribution margin. C. Finished goods inventory level multiplied by the unit sales price. D. Finished goods inventory level multiplied by a constant unit contribution margin. Page 1 of 10
MANAGEMENT ADVISORY SERVICE Absorption costing 11. All of the following are names for the product costing method in which both fixed and variable costs are included in overhead rates, except: A. absorption costing C. direct costing B. conventional costing D. full costing 12. Which of the following is not associated with absorption costing? A. contribution margin C. gross margin B. functional format D. Period costs 13. Under absorption costing, fixed manufacturing overhead could be found in all of the following except the A. Cost of Goods Sold. C. period costs. B. finished goods inventory account. D. work-in-process account. 14. Jansen, Inc. pays bonuses to its managers based on operating income. The company uses absorption costing, and overhead is applied on the basis of direct labor hours. To increase bonuses, Jansen’s managers may do all of the following except A. Produce those products requiring the most direct labor. B. Defer expenses such as maintenance to a future period. C. Decrease production of those items requiring the most direct labor. D. Increase production schedules independent of customer demands. 15. Unabsorbed fixed overhead costs in an absorption costing system are A. costs that cannot be controlled. B. excess variable overhead costs. C. variable overhead costs not allocated to units produced. D. fixed manufacturing costs not allocated to units produced. 16. When a firm prepares financial reports by using absorption costing A. Profits will always increase with increases in sales. B. Profits will always decrease with decreases in sales. MSQ-2 – Variable Costing & Absorption Costing
HILARIO G. TAN C. Decreased output and constant sales result in increased profits. D. Profits may decrease with increased sales even if there is no change in selling prices and costs. 17. Under absorption costing, if sales remain constant from period 1 to period 2, the company will report a larger income in period 2 when A. period 1 production exceeds period 2 production. B. period 2 production exceeds period 1 production. C. fixed production costs are larger in period 2 than period 1. D. variable production costs are larger in period 2 than period 1. Variable & absorption costing 18. A cost that is included as part of product costs under both absorption costing and direct costing is: A. insurance D. variable marketing expenses. B. managerial staff costs E. variable materials handling labor C. taxes on factory building 19. If unit costs remain unchanged and sales volume and sales price per unit both increase from the preceding period when operating profits were earned, operating profits must A. Increase under the variable costing method. B. Decrease under the variable costing method. C. Increase under the absorption costing method. D. Decrease under the absorption costing method. 20. When comparing absorption costing with variable costing, which of the following statements is not true? A. When sales volume is more than production volume, variable costing will result in higher operating profit. B. Under absorption costing, operating profit is a function of both sales volume and production volume. C. Absorption costing enables managers to increase operating profits in the short run by Page 2 of 10
MANAGEMENT ADVISORY SERVICE increasing inventories. D. A manager who is evaluated based on variable costing operating profit would be tempted to increase production at the end of a period in order to get a more favorable review. 21. A firm presently has total sales of $100,000. If its sales rise, its A. fixed costs will also rise. B. per unit variable costs will rise. C. net income based on absorption costing will go up more than its net income based on variable costing. D. net income based on variable costing will go up more than its net income based on absorption costing. 22. Both Company Y and Company Z produce similar products that need negligible distribution costs. Their assets operation and accounting are very similar in all respects except that Company Y uses direct costing and Company Z uses absorption costing. A. Co. Z would report a higher net income than Co. Y for the years in which production equals sales B. Co. Y would report a higher inventory value than Co. Z for the years in which production exceeds sales C. Co. Z would report a higher inventory value than Co. Y for the years in which production exceeds sales D. Co. Y would report a higher inventory value than Co. Z for the years in which production exceeds the normal or practical capacity 23. Absorption costing and variable costing are two different methods of assigning costs to units produced. Of the following five cost items listed, identify the one that is not correctly accounted for as a product cost. Part of Product Cost under Absorption Cost Variable Cost A. Direct labor cost Yes Yes B. Insurance on factory Yes No C. Manufacturing supplies Yes Yes D. Packaging and shipping costs Yes Yes MSQ-2 – Variable Costing & Absorption Costing
HILARIO G. TAN 24. A company’s net income recently increased by 30% while its inventory increased to equal a full year’s sales requirements. Which of the following accounting methods would be most likely to produce the favorable income results? A. Absorption costing. C. Standard direct costing. B. Direct costing. D. Variable costing. 25. Variable costing and absorption costing will show the same incomes when there are no A. beginning and ending inventories. B. beginning inventories. C. ending inventories. D. variable costs. 26. Absorption costing differs from variable costing in that A. absorption costing inventories are more correctly valued. B. companies using absorption costing have lower fixed costs. C. standards can be used with absorption costing, but not with variable costing. D. production influences income under absorption costing, but not under variable costing. 27. In a recent period, Marvel Co. incurred $20,000 of fixed manufacturing overhead and deducted $30,000 of fixed manufacturing overhead. Marvel Co. must be using A. absorption costing. C. standard costing. B. direct costing. D. variable costing. 28. Other things being equal, net income computed by direct costing method would exceed net income computed by absorption costing method if A. Units sold were to exceed units produced. B. Units produced were to exceed units sold. C. Fixed manufacturing costs were to increase. D. Variable manufacturing costs were to increase.
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MANAGEMENT ADVISORY SERVICE 29. Net income is lower under variable costing than under absorption costing when A. Production equals sales. B. Production exceeds sales. C. Production is less than sales. D. Production increases from the previous period. 30. President X of WXY Corporation requested you to explain the difference of net income between the variable costing income statements presentation and the absorption costing method. You would say that the difference A. Is attributable to the variable costs in the inventory. B. Is attributable to the fixed costs in ending inventory. C. Is equal to the fixed costs per unit times the number of units sold. D. Is none if there is no change in the fixed costs in the beginning and ending inventories. 31. If inventory quantities increase during a period, A. Variable costing profits will equal absorption costing profits. B. Absorption costing profits will exceed variable costing profits. C. Variable costing profits will exceed absorption costing profits. D. Variable costing will show a higher inventory value than absorption costing. 32. A manufacturing company prepares income statements using both absorption- and variablecosting methods. At the end of the period, actual sales revenues, total gross margin, and total contribution margin approximated budgeted figures, whereas net income was substantially below the budgeted amount. There were no beginning or ending inventories. The most likely explanation of the net income shortfall is that, compared to budget, actual A. Manufacturing fixed costs had increased. B. Selling and administrative fixed expenses had increased. C. Sales price and variable costs had declined proportionately. D. Sales prices had declined proportionately more than variable costs.
MSQ-2 – Variable Costing & Absorption Costing
HILARIO G. TAN 33. As compared with total absorption costing profit over the entire life of a company, total variable costing profit will A. Be less. B. Be equal. C. Be greater. D. Be substantially greater or less depending upon external factors 34. How will a favorable volume variance affect net income under each of the following methods? A. B. C. D. Absorption Increase Increase Reduce Reduce Variable No effect Reduce Increase No effect 35. A single-product company prepares income statements using both absorption and variable costing methods. Manufacturing overhead cost applied per unit produced in 2001 was the same as in 2000. The 2001 variable costing statement reported a profit whereas the 2001 absorption costing statement reported a loss. The difference in reported income could be explained by units produced in 2001 being A. Less than units sold in 2001. B. In excess of units sold in 2001. C. Less than the activity level used for allocating overhead to the product. D. In excess of the activity level used for allocating overhead to the product. PROBLEMS Variable costing 1. MNO Products, Inc. planned and actually manufactured 200,000 units of its single product in 2000, its first year of operations. Variable manufacturing costs were P30 per unit of product. Planned and actual fixed manufacturing costs were P600,000, and marketing and administrative costs totaled P400,000 in 2000. MNO sold 120,000 units of product in 2000 at a selling price of P40 per unit. What is the cost of the ending inventory assuming variable costing is used? A. P2,250,000 C. P2,640,000 B. P2,400,000 D. P2,750,000 Page 4 of 10
MANAGEMENT ADVISORY SERVICE 2. LY & Company completed its first year of operations during which time the following information were generated: Total units produced 100,000 Total units sold @ P100 per unit 80,000 Work in process ending inventory 20,000 Costs Variable Cost per Unit Fixed Costs Raw materials P20.00 Direct labor 12.50 Factory overhead 7.50 P1.2 million Selling and administrative 10.00 0.7 million If the company used variable (direct) costing method, the operating income would be A. P2,100,000 C. P3,040,000 B. P2,480,000 D. P4,000,000c. 3. Youthful Biscuits manufactures and sells boxed coconut cookies. The biggest market for these cookies are as gifts that college students buy for their business teachers. There are 100 cookies per box. The following income statement shows the result of the first year of operations. This statement was the one included in the company’s annual report to the stockholders. Sales (400 boxes at P12.50 a box) P5,000.00 Less: Cost of goods sold (400 boxes at P8 per box) 3,200.00 Gross margin 1,800.00 Less: Selling and administrative expenses 800.00 Net income 1,000.00 Variable selling and administrative expenses are P0.90 per box sold. The company produced 500 boxes during the year. Variable manufacturing costs are P5.25 per box and fixed manufacturing overhead costs total P1,375 for the year. What is the company’s direct costing net income? A. P 725 C. P2,265 B. P1,000 D. P2,540
MSQ-2 – Variable Costing & Absorption Costing
HILARIO G. TAN Absorption costing 4. The total production cost for 20,000 units was P21,000 and the total production cost for making 50,000 units was P34,000. Once production exceeds 25,000 units, additional fixed costs of P4,000 were incurred. The full production cost per unit for making 30,000 units is: A. P0.30 C. P0.84 B. P0.68 D. P0.93 5. West Co.’s 1988 manufacturing costs were as follows: Direct materials and direct labor $700,000 Other variable manufacturing costs 100,000 Depreciation of factory building and manufacturing equipment 80,000 Other fixed manufacturing overhead 18,000 What amount should be considered product cost for external reporting purposes? A. $700,000 C. $880,000 B. $800,000 D. $898,000 6. Coomber Industries manufactures a single product using standard costing. Variable production costs are $13 and fixed production costs are $125,000. Coomber uses a normal activity of 12,500 units to set its standard costs. Coomber began the year with 1,000 units in inventory, produced 11,000 units, and sold 11,500 units. The standard cost of goods sold under absorption costing would be A. $115,000 C. $253,000 B. $149,500 D. $264,500 7. Z Corp. incurred the following costs in 2001 (its first year of operations) based on production of 10,000 units: Direct material $5 per unit Direct labor $3 per unit Variable product costs $2 per unit Fixed product costs (in total) $100,000
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MANAGEMENT ADVISORY SERVICE
HILARIO G. TAN
When Z Corp. prepared its 2001 financial statements, its Cost of Goods Sold was listed at $100,000. Based on this information, which of the following statements must be true: A. Z Corp. sold 5,000 units. B. Z Corp. had a very profitable year. C. Z Corp. sold all 10,000 units that it produced. D. From the information given, one cannot tell whether Z Corp.'s financial statements were prepared based on variable or absorption costing.
Units Produced Sales Planned Activity Year 1 90,000 90,000 100,000 Year 2 95,000 95,000 100,000 Year 3 90,000 90,000 100,000 Because Blue Company uses an absorption-costing system, gross margin for year 3 should be A. Equal to Year 1. C. Greater than Year 1. B. Equal to Year 2. D. Greater than Year 2.
8. A company manufactures a single product for its customers by contracting in advance of production. Thus, the company produces only units that will be sold by the end of each period. For the last period, the following data were available: Sales $40,000 Direct materials 9,050 Direct labor 6,050 Rent (9/10 factory, 1/10 office) 3,000 Depreciation on factory equipment 2,000 Supervision (2/3 factory, 1/3 office) 1,500 Salespeople’s salaries 1,300 Insurance (2/3 factory, 1/3 office) 1,200 Office supplies 750 Advertising 700 Depreciation on office equipment 500 Interest on loan 300 The gross profit margin percentage (rounded) was A. 34% C. 44% B. 41% D. 46%
10. Don Juan Ltd. Manufactures a single product for which the costs and selling prices are: Variable production costs P 50 per unit Selling price¶ P125 per unit Fixed production overhead P200,000 per quarter Fixed selling and administrative overhead P80,000 per quarter Normal capacity 20,000 units per quarter Production in first quarter was 19,000 units and sales volume was 16,000 units. No opening inventory for the quarter. The absorption costing profit for the quarter was A. P920,000 C. P960,000 B. P950,000 D. P970,000
9. The Blue Company has failed to reach its planned activity level during its first 2 years of operation. The following table shows the relationship among units produced, sales, and normal activity for these years and the projected relationship for Year 3. All prices and costs have remained the same for the last 2 years and are expected to do so in Year 3. Income has been positive in both Year 1 and Year 2. MSQ-2 – Variable Costing & Absorption Costing
Variable costing & absorption costing 11. In the ABC Company, sales are P800,000, cost of goods under absorption costing is P600,000, and total operating expenses are P120,000. If cost of goods sold is 70% variable and total operating expenses are 60% fixed, what is the contribution margin under variable costing? A. P260,000. C. P332,000. B. P308,000. D. P380,000. 12. A company has the following cost data: Fixed manufacturing costs Fixed selling, general, and administrative costs Variable selling costs per unit sold
$2,000 1,000 1 Page 6 of 10
MANAGEMENT ADVISORY SERVICE Variable manufacturing costs per unit
HILARIO G. TAN 2
Beginning inventory 0 units Production 100 units Sales 90 units at $40 per unit Variable and absorption-cost net incomes are: A. $320 variable, $520 absorption C. $520 variable, $320 absorption B. $330 variable, $530 absorption D. $530 variable, $330 absorption 13. A company had an income of P50,000 using direct costing for a given month. Beginning and ending inventories for the month are 13,000 units and 18,000 units, respectively. Ignoring income tax, if the fixed overhead application rate was P2 per unit, what was the income using absorption costing? A. P40,000 C. P60,000 B. P50,000 D. P70,000 14. GHI Company had P100,000 income using absorption costing. GHI has no variable manufacturing costs. Beginning inventory was P5,000 and ending inventory was P12,000. What is the income under variable costing? A. P88,000 C. P100,000. B. P93,000 D. P107,000 15. Fleet, Inc. manufactured 700 units of Product A, a new product, during the year. Product A’s variable and fixed manufacturing costs per unit were $6.00 and $2.00 respectively. The inventory of Product A on December 31, consisted of 100 units. There was no inventory of Product A on January 1. What would be the change in the dollar amount of inventory on December 31 if variable costing were used instead of absorption costing? A. $0 C. $200 increase. B. $200 decrease. D. $800 decrease.
MSQ-2 – Variable Costing & Absorption Costing
16. At the end of Killo Co.’s first year of operations, 1,000 units of inventory remained on hand. Variable and fixed manufacturing cost per unit were $90 and $20, respectively. If Killo uses absorption costing rather than direct (variable) costing, the result would be a higher pretax income of A. $0. C. $70,000. B. $20,000. D. $90,000. 17. A company manufactures 50,000 units of a product and sells 40,000 units. Total manufacturing cost per unit is $50 (variable manufacturing cost, $10; fixed manufacturing cost, $40). Assuming no beginning inventory, the effect on net income if absorption costing is used instead of variable costing is that: A. net income is the same C. net income is $400,000 lower B. net income is $200,000 higher D. net income is $400,000 higher 18. During its first year of operations, a company produced 275,000 units and sold 250,000 units. The following costs were incurred during the year: Variable Cost per Unit Fixed Costs Direct materials $15.00 Direct labor 10.00 Manufacturing overhead 12.50 $2,200,000 Selling and administrative 2.50 1,375,000 The difference between operating income calculated on the absorption-costing basis and on the variable costing basis is that absorption-costing operating income is A. $62,500 lesser. C. $220,000 greater. B. $200,000 greater. D. $325,000 greater. Questions 19 through 21 are based on the following information. The following information is available for X Co. for its first year of operations: Sales in units Production in units
5,000 8,000
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MANAGEMENT ADVISORY SERVICE Manufacturing costs: Direct labor Direct material Variable overhead Fixed overhead Net income (absorption method) Sales price per unit
HILARIO G. TAN $3 per unit 5 per unit 1 per unit $100,000 $30,000 $40
19. What would X Co. have reported as its income before income taxes if it had used variable costing? A. ($30,000) C. $30,000 B. ($7,500) D. $67,500 20. What was the total amount of SG&A expense incurred by X Co.? A. $6,000 C. $36,000 B. $30,000 D. $62,500 21. Based on variable costing, what would X Co. show as the value of its ending inventory? A. $24,000 C. $64,500 B. $27,000 D. $120,000 Questions 22 through 25 are based on the following information. The annual flexible budget below was prepared for use in making decisions relations to Product X. 100,000 units 150,000 units 200,000 units Sales volume $ 800,000 $1,200,000 $1,600,000 Manufacturing costs: Variable $300,000 $450,000 $600,000 Fixed 200,000 200,000 200,000 $500,000 $650,000 $800,000 Selling & other expenses Variable $200,000 $300,000 $400,000 Fixed 160,000 160,000 160,000 MSQ-2 – Variable Costing & Absorption Costing
Income (or loss)
$360,000 $(60,000)
$460,000 $90000
$560,000 $240,000
The 200,000 unit budget has been adopted and will be used for allocating fixed manufacturing costs to units of Product X. At the end of the first 6 months, the following information is available: Units Production completed 120,000 Sales 60,000 All fixed costs are budgeted and incurred uniformly throughout the year, and all costs incurred coincide with the budget. Over- and under-applied fixed manufacturing costs are deferred until year-end. Annual sales have the following seasonal pattern. First quarter Second quarter Third quarter Fourth quarter
Portion of Annual Sales 10% 20% 30% 40%
22. The amount of fixed factory costs applied to product during the first 6 months under absorption costing is A. Over-applied by $20,000. C. Under-applied by $80,000. B. Under-applied by $40,000. D. Equal to the fixed costs incurred. 23. Reported net income (or loss) for the first 6 months under absorption costing is A. $(40,000) C. $40,000 B. $0 D. $160,000 24. Reported net income (or loss) for the first 6 months under variable costing is A. $(180,000) C. $40,000 B. $0 D. $180,000
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MANAGEMENT ADVISORY SERVICE
HILARIO G. TAN
25. Assuming that 90,000 units of Product X were sold during the first 6 months and that this is to be used as a basis, the revised budget estimate for the total number of units to be sold during this year is A. 200,000 C. 360,000 B. 240,000 D. None of the above Questions 26 through 31 are based on the following information. Valyn Corporation employs an absorption costing system for internal reporting purposes; however, the company is considering using variable costing. Data regarding Valyn’s planned and actual operations for the 1995 calendar year are presented below. Planned Activity Actual Activity Beginning finished goods inventory in units 35,000 35,000 Sales in units 140,000 125,000 Production in units 140,000 130,000 The planned per unit cost figures shown in the next schedule were based on the estimated production and sale of 140,000 units in 1995. Valyn uses a predetermined manufacturing overhead rate for applying manufacturing overhead to its product. Thus, a combined manufacturing overhead rate of $9.00 per unit was employed for absorption costing purposes in1995. Any over- or under-applied manufacturing overhead is closed to the cost of goods sold account at the end of the reporting year.
Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Variable administrative expenses Fixed administrative expenses Total MSQ-2 – Variable Costing & Absorption Costing
Planned Cost Per Unit $12.00 9.00 4.00 5.00 8.00 7.00 2.00 3.00 $50.00
Total $1,680,000 1,260,000 560,000 700,000 1,120,000 980,000 280,000 420,000 $7,000,000
The 1995 beginning finished goods inventory for absorption costing purposes was valued at the 1994 planned unit manufacturing cost, which was the same as the 1995 planned unit manufacturing cost. There are no work-in-process inventories at either the beginning or the end of the year. The planned and actual unit selling price for 1995 was $70.00 per unit. 26. The value of Valyn Corporation’s 1995 actual ending finished goods inventory on the absorption costing bases was A. $900,000 C. $1,220,000 B. $1,200,000 D. $1,350,000 27. The value of Valyn Corporation’s 1995 actual ending finished goods inventory on the variable costing basis was A. $750,000 C. $1,125,000. B. $1,000,000. D. $1,400,000. 28. Valyn Corporation’s total fixed costs expensed in 1995 on the absorption costing bases were A. $2,030,000 C. $2,095,000 B. $2,055,000 D. $2,120,000 29. Valyn Corporation’s actual manufacturing contribution margin for 1995 calculated on the variable costing basis was A. $4,375,000 C. $4,910,000 B. $4,935,000 D. $5,625,000.
Incurred Costs $1,560,000 30. The total variable costs expensed in 1995 by Valyn Corporation on the variable costing basis 1,170,000 was 520,000 A. $4,325,000 C. $4,500,000 715,000 B. $4,375,000 D. $4,550,000 1,000,000 980,000 31. The difference between Valyn Corporation’s 1995 operating income calculated on the 250,000 absorption costing basis and calculated on the variable costing basis was 425,000 A. $25,000 C. $65,000 B. $40,000 D. $90,000 $6,620,000 Page 9 of 10
MANAGEMENT ADVISORY SERVICE Questions 32 through 37 are based on the following information. Louder Industries manufactures a single product. Variable production costs are $20 and fixed production costs are $150,000. Louder uses a normal activity of 10,000 units to set its standard costs. Louder began the year with no inventory, produced 11,000 units, and sold 10,500 units. 32. Ending inventory under variable costing would be A. $10,000 C. $17,500 B. $15,000 D. $20,000 33. Ending inventory under absorption costing would be A. $10,000 C. $17,500 D. $20,000 B. $15,000 34. The volume variance under variable costing would be A. $0 C. $15,000 B. $10,000 D. Some other number. 35. The volume variance under absorption costing would be A. $0 C. $15,000 B. $10,000 D. Some other number. 36. The standard cost of goods sold under variable costing would be A. $200,000 C. $367,500 B. $210,000 D. Some other number.
HILARIO G. TAN ANSWER KEY Theory 1. A 2. C 3. B 4. D 5. C 6. D 7. C 8. B 9. A 10. B 11. C 12. A 13. C 14. C 15. D 16. D 17. B 18. E 19. A 20. D
21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35.
D C D A A D A A B D B B B A A
Problem 1. B 2. A 3. A 4. D 5. D 6. D 7. A 8. D 9. A 10. B 11. C 12. B 13. C 14. B 15. B 16. B 17. D 18. B 19. B 20. D
21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37.
B A C B D B B C D B A A C A C B C
37. The standard cost of goods sold under absorption costing would be A. $200,000 C. $367,500 B. $210,000 D. Some other number. When the going gets tough, the tough gets going. MSQ-2 – Variable Costing & Absorption Costing
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