Podcast
Questions and Answers
What is the total unit product cost per T-shirt for Happy Yarn Inc.?
What is the total unit product cost per T-shirt for Happy Yarn Inc.?
What is the net operating income for Happy Yarn Inc. using the variable costing method?
What is the net operating income for Happy Yarn Inc. using the variable costing method?
In a variable costing income statement, what is included in the cost of goods sold?
In a variable costing income statement, what is included in the cost of goods sold?
What impact does an increase in production volume have on fixed costs in a variable costing income statement?
What impact does an increase in production volume have on fixed costs in a variable costing income statement?
Signup and view all the answers
Which costing method would show a higher net income when production exceeds sales?
Which costing method would show a higher net income when production exceeds sales?
Signup and view all the answers
Which method, between variable costing and absorption costing, focuses on how changes in production volume affect net operating income?
Which method, between variable costing and absorption costing, focuses on how changes in production volume affect net operating income?
Signup and view all the answers
In a firm using variable costing, how do profits behave with sales fluctuations?
In a firm using variable costing, how do profits behave with sales fluctuations?
Signup and view all the answers
In a variable costing income statement, how are fixed manufacturing costs treated?
In a variable costing income statement, how are fixed manufacturing costs treated?
Signup and view all the answers
When production levels surpass normal capacity in a direct costing system, what is the inventory value comparison between companies?
When production levels surpass normal capacity in a direct costing system, what is the inventory value comparison between companies?
Signup and view all the answers
How do unit product costs change in variable costing with varying production quantities?
How do unit product costs change in variable costing with varying production quantities?
Signup and view all the answers
What happens to fixed costs per unit when the activity level increases within the relevant range?
What happens to fixed costs per unit when the activity level increases within the relevant range?
Signup and view all the answers
In an income statement using the direct costing method, where are fixed selling and administrative expenses typically included?
In an income statement using the direct costing method, where are fixed selling and administrative expenses typically included?
Signup and view all the answers
What are unabsorbed fixed overhead costs in an absorption costing system?
What are unabsorbed fixed overhead costs in an absorption costing system?
Signup and view all the answers
When comparing variable costing and absorption costing, under what condition will both methods show the same net operating income?
When comparing variable costing and absorption costing, under what condition will both methods show the same net operating income?
Signup and view all the answers
What is a key difference between absorption costing and variable costing related to profits and sales fluctuations?
What is a key difference between absorption costing and variable costing related to profits and sales fluctuations?
Signup and view all the answers
How does variable costing net income compare to absorption costing net income when production is lower than sales?
How does variable costing net income compare to absorption costing net income when production is lower than sales?
Signup and view all the answers
What characterizes variable costing with respect to the treatment of fixed selling and administrative expenses?
What characterizes variable costing with respect to the treatment of fixed selling and administrative expenses?
Signup and view all the answers
