AMIS 525 Pop Quiz-Chapter 9 1.

If the number of units produced exceeds the number of units sold, then net operating income under absorption costing will: A) be equal to the net operating income under variable costing. B) be greater than net operating income under variable costing. C) be equal to the net operating income under variable costing plus total fixed manufacturing costs. ) be equal to the net operating income under variable costing less total fixed manufacturing costs. !. "ver an extended period of time in which the final ending inventories are #ero, the accumulated net operating income figures reported under absorption costing will be: A) greater than those reported under variable costing. $) less than those reported under variable costing. C) the same as those reported under variable costing. ) higher or lower since no generali#ation can be made.

%. &outsong Compan' had the following sales and production data for the past four 'ears: Year Year Year Year 1 2 3 4 (roduction in units......................................................................................... ),*** +,*** ,,*** -,*** .ales in units.................................................................................................. ),*** ),*** -,*** /,*** .elling price per unit, variable costs per unit, and total fixed costs are the same in each 'ear. 0hich of the following statements is not correct1 A) 2nder variable costing, net operating income for 3ear 1 and 3ear ! would be the same. B) Because of the changes in production levels, under variable costing the per unit inventory value will change each year. C) 4he total net operating income for all four 'ears combined would be the same under variable and absorption costing. ) 2nder absorption costing, net operating income in 3ear , would be less than the net operating income in 3ear !. ,. 0illis Compan' had a net operating income of 5/-,*** using variable costing and a net operating income of 5-/,*** using absorption costing. 6ariable production costs were 51- per unit. 4otal fixed manufacturing overhead was 51!*,*** and 1*,*** units were produced. uring the 'ear, the inventor' level: A) increased b' 1,!** units. $) increased b' 1,-** units. C) decreased by 1,500 units.

) decreased b' 1,!** units. -. At the end of 7illo Co.8s first 'ear of operations, 1,*** units of inventor' remained on hand. 6ariable and fixed manufacturing costs per unit were 5+* and 5!*, respectivel'. If 7illo uses absorption costing, its net operating income would be higher than if it used variable costing b': A) 5*. B) $ 0,000. C) 5/*,***. ) 5+*,***. !se the following information for "uestions # and $ 9lliot Compan', which has onl' one product, has provided the following data concerning its most recent month of operations: .elling price ............................ 511!

2nits in beginning inventor' ............. * 2nits produced ........................... ,,+** 2nits sold ............................... ,,-** 2nits in ending inventor' ................ ,** 6ariable costs per unit: irect materials ....................... 51+ irect labor ........................... ,6ariable manufacturing overhead ........ 6ariable selling and administrative ....

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:ixed costs: :ixed manufacturing overhead ........... 511/,)** :ixed selling and administrative ....... !!,-** ). 0hat is the net income for the month under variable costing1 A) 51;,*** $) <51+,)**) C) 5+,)** %) $&,'00 0hat is the net income for the month under absorption costing1 A) <51+,)**) $) 5+,)** C) 5;,,** %) $1&,000

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