1.The costs assigned to units in inventory are typically lower under absorption

Question

1.The costs assigned to units in inventory are typically lower under absorption costing than under variable costing.

TRUE OR FALSE

2. Under variable costing, product cost contains some fixed manufacturing overhead cost.

TRUE OR FALSE

3. Net operating income is affected by changes in production under both variable costing and absorption costing.

TRUE OR FALSE

4. Variable selling and administrative expenses are part of product costs under the variable costing approach.

TRUE OR FALSE

5. Under the absorption costing method, a company can increase profits by increasing production rather than by increasing sales.

TRUE OR FALSE

11. If a company switches from a traditional costing system to an activity-based costing system in which some activities are batch-level and product-level, costs ordinarily shift from high-volume to low-volume products.

TRUE OR FALSE

Explanation / Answer

Hi,

Please find the answers as follows:

1) False

2) False

3) False

4) False

5) True

6) False

Thanks.

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