E-PolyLearning

1. Under absorption costing, the magnitude for favorable volume production variance is affected by the choice of
a. unplanned level
b. budgeting level
c. numerator level
d. denominator level
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Answer: (d).denominator level

2. An approach used for choosing capacity level, having no beginning inventory, is classified as
a. write off variance approach
b. write in variance approach
c. adjusted variance approach
d. unadjusted variance approach
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Answer: (a).write off variance approach

3. If the budgeted fixed cost is $26000, per unit budgeted denominator level is 1300 units, then budgeted fixed cost will be
a. $50
b. $30
c. $20
d. $40
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Answer: (c).$20

4. If the production is less than sales so, an operating income under absorption costing will be called
a. higher income
b. zero dividends
c. negative income value
d. lower income
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Answer: (d).lower income

5. If the inventory level decreases then operating income, under variable costing, will be reported
a. more
b. less
c. zero
d. none of above
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Answer: (a).more

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