Cost Of Labor: The cost of labor is the sum of all wages paid to employees, as well as the cost of employee benefits and payroll taxes paid by an employer. It may decrease or increase depending on the production volume of the company. A variable cost creates changes in the proportion of the production output. health insurance. flynnj6. C) classifying costs as either inventoriable or period costs. All other trademarks and copyrights are the property of their respective owners. Fixed Costs and Variable Costs: The total fixed costs are constant when there is a change in outputs produced. Fixed or Variable Expenses. c. The annual costs of a business's fire insurance policy. Depending on the type of business, the variable expense will vary. A. What are Variable Costs? The costs of machinery. A) rental expense for factory building for manufacturer of electronics B) lease cost for factory machine for manufacturer of electronics C) fuel for airplane for airline D) depreciation expense of airplane for airline Understanding Semi-Variable Costs . The true statement about cost behavior is that: A. variable costs change on a per-unit basis and change in total as activity changes. a. variable expenses b. discretionary expenses c. fixed expenses d. all of the above. Rent is usually a fixed cost as ⦠In ________, fixed manufacturing costs are included as inventoriable costs. Which of the following is a variable cost for a company that makes bread? i. 5) Which of the following costs is a variable cost? The cost of aluminum used for its automobiles. One possible means of determining the difference between operating incomes for absorption costing and variable costing is by ________. Which of the following is a reason for companies adopting variable costing for internal reporting purposes? Fixed. Sales $60,000 Variable Costs 24,000 Fixed Costs 10,000 Net ⦠Write. The variable costs are the costs that vary with production volume. Information is provided concerning the zooglar product. The fixed portion of a semi-variable cost is incurred no matter the activity volume, while the variable portion occurs as a ⦠Trimming a fixed cost, like your cell phone plan, insurance or your cable package, requires only making a decision once, and then living with that decision for the next several months or years. the combination of variable costs that are necessary to make the product or provide the service. Under absorption costing, if a manager's bonus is tied to operating income, then increasing inventory levels compared to last year would result in ________. The difference between operating incomes under variable costing and absorption costing centers on how to account for ________. ) Direct Materials B. Which of the following is a variable expense? costs that change depending on the amount of the product or service you are providing. a. In the context of economics and accounting, the total costs incurred by a firm may be bifurcated into different classes such as direct costs & indirect costs, fixed costs & variable costs, and operating costs & manufacturing costs. A. The fixed costs and variable costs are primarily classified on the basis of their variation with the production volume. a. sales commission b. hourly wages c. rent d. materials 2 See answers thegreatandpowe thegreatandpowe The answer is c. Rent abreen609 abreen609 The correct answer is rent. Expense that stays the same from month to month. answer choices . Which of the following is correct regarding a relevant range? 20,000. These costs vary depending on your usage of products or services, and they can change depending on any number of factors. Under absorption costing, fixed manufacturing costs ________. An implicit cost is i. Hence when its sales are $10,000 the cost of goods will be $6,000. Total fixed costs will not change. Which of the following would result in the highest profit being reported if the company has 1,000 units of ending inventory. If the unit level of inventory increases during an accounting period, then ________. Which of the following expenses is not a variable cost? Depreciation C. Rent expense D. Property Taxes. E) how costs react to a change in selling price. Which of the following costs is inventoried when using absorption costing? ) ________ is a method of inventory costing in which all variable manufacturing costs and all fixed manufacturing costs are included as inventoriable costs. Sciences, Culinary Arts and Personal Variable Expense. groceries. a. Rent/Mortgage. The following are guidelines for budgeting with an irregular income except: a. prioritize the list in order of importance b. make a list of all of your expenses for the month ahead Which of the following is true of variable costing? ) Cost of materials is one of the variable values in a business. B. Manufacturing businesses use variable costs more frequently, since materials cost ⦠e. The monthly costs of the business's security system. Explain which of the following is a fixed cost or a variable cost for Toyota a. D) whether a particular expense has been ethically incurred. Gift Gallery sold 2,000 zooglars during 2010. PLAY. b. Variable costs are expenses that vary in proportion to the volume of goods Inventory Inventory is a current asset account found on the balance sheet, consisting of all raw materials, work-in-progress, and finished goods that a company has accumulated. Variable expenses, also called variable costs, are expenses that can change over time. SURVEY . On the other hand, the fixed costs are the costs which do not vary with the production volume for a given period within a certain relevant range and hence the costs such as costs of machinery, costs of rental space, the monthly cost of business's security system and the annual cost of business's fire insurance policy will remain fixed regardless of the production volume for the given period. Which of the following statements is true regarding fixed and variable costs? Which of the following costs is inventoried when using variable costing? Fixed Expense. The only difference between variable and absorption costing is the expensing of ________. Which of the following is a variable expense? A) rent on factory building B) electricity consumed in manufacturing process C) sales commission paid on each sale D) advertising costs incurred for the product a. The rent for a warehouse B. Phone. Answer: A 17) A mixed cost is A) a fixed cost. Expense that changes from month to month. © copyright 2003-2020 Study.com. Which of the following expenses best represents variable costs? Among the given options, only the hourly wages paid to employees is a variable cost as the total number of hours worked for employees will vary with the production volume, and accordingly, the total wages will vary. Money paid for goods and services. Cash â Cash that is required for an immediate expense. Which of the following expenses is not a variable cost? All rights reserved. c. The cost of labor for its assembly line workers. a. sales commission b. hourly wages c. rent d. materials Some of the common examples of variable expense are the following: Advertising; Product creation â amount involved in the creation of the product or to purchase inventory. Further, we know that stock A is fairly priced and that the betas of stocks A and B are correct. C) a variable cost. Under variable costing, if a manager's bonus is tied to operating income, then increasing inventory levels compared to last year would result in ________. Cost of shipping products 8. NEW! variable costs are constant on a per-unit basis and are constant in total as activity changes. rental payments. (f) The fixed costs amount to Rs. 20 ; Variable cost per unit Rs. Key Concepts: Terms in this set (20) Expense. The cost ⦠Find GCSE resources for every subject. For example, increased use of your car produces a corresponding increase in your variable expenses for fuel and car maintenance. Many companies have switched from absorption costing to variable costing for internal reporting ________. Gravity. The costs of rental space. When comparing the operating incomes between absorption costing and variable costing, and ending finished inventory exceeds beginning finished inventory, it may be assumed that ________. ________ is a method of inventory costing in which only variable manufacturing costs are included as inventoriable costs. Our experts can answer your tough homework and study questions. Unfortunately, variable costs are also some of the toughest expenses to cut back on, because doing so requires a daily commitment to frugal decision-making. Assume a manufacturing company that has started production in the current year. b. When the sales are $30,000 the cost of goods sold will be $18,000. Which of the following expenses best represents variable costs? A nonmonetary opportunity cost b. Created by. True or false? Spell. What does the cost of goods or services sold include? Thus, the materials used as the components in a product are considered variable costs, because they vary directly with the number of units of product manufactured. Tags: Question 8 . The gross-margin format is used for ________. 2. Student loan payments. D) always an indirect cost. Critics of absorption costing suggest evaluating management on its ability to ________. ) The property taxes on its Toyota City assembly plant. In accounting, costs are considered fixed or variable, with all businesses using a combination of both. Fixed Costs: Definition, Formula & Examples, Equivalent Units & the Weighted-Average Method Formula, Cost Classification: Predicting Behavior & Decision-Making, High-Low Method Accounting: Formula & Examples, Manufacturing Overhead: Definition, Formula & Examples, Statement of Retained Earnings: Definition, Formula & Example, Absorption Costing: Income Statement & Marginal Costing, Activity Cost Pools: Definition & Examples, Cost Centers, Profit Centers & Investment Centers, Total Cost in Economics: Definition & Formula, How to Calculate the Break-Even Point - Definition & Formula, Activity-Based Costing: Definition, Formula & Examples, Master Budget in Accounting: Definition, Components & Example, Marginal Cost: Definition, Equation & Formula, Cost Driver in Accounting: Definition, Analysis & Example, Labor Rate Variance: Definition & Formula, Relevant & Irrelevant Costs for Decision-Making, GED Social Studies: Civics & Government, US History, Economics, Geography & World, ILTS Business, Marketing, and Computer Education (171): Test Practice and Study Guide, Intro to Excel: Essential Training & Tutorials, Principles of Marketing: Certificate Program, Principles of Management: Certificate Program, UExcel Introduction to Macroeconomics: Study Guide & Test Prep, Introduction to Financial Accounting: Certificate Program, Financial Accounting: Homework Help Resource, DSST Organizational Behavior: Study Guide & Test Prep, Introduction to Organizational Behavior: Certificate Program, UExcel Organizational Behavior: Study Guide & Test Prep, DSST Introduction to Business: Study Guide & Test Prep, Introduction to Business: Certificate Program, Principles of Macroeconomics: Certificate Program, Biological and Biomedical Match. The correct answer is d. The hourly wages paid to employees. Rent on an apartment B. Groceries C. A gym membership D. A car payment Which of the following is most likely to a variable cost for a business firm? Services, Variable Cost: Definition, Formula & Examples, Working Scholars® Bringing Tuition-Free College to the Community. ________ method includes fixed manufacturing overhead costs as inventoriable costs. 1. New questions in Mathematics. A. STUDY. B) a cost with fixed and variable elements. Which of the following inventory costing methods shown below is most likely to cause undesirable incentives for managers to build up finished goods inventory? What are implicit costs? Both costs are constant when considered on a per-unit basis. 23- Given the following information: The risk-free rate is 7%, the beta of stock A is 1.2, the beta of stock B is 0.7, the expected return on stock A is 13.5%, and the expected return on stock B is 11%. Learn. How are implicit costs different from explicit costs? d. The relevant range will remain the same as long For instance, if a company purchases a product for $30 and then sells it for $50, its cost of goods sold will be a constant rate of 60%. Another example of a variable expense is a retailer's cost of goods sold. Bread ingredients C. An oven D. A salaried worker Which one of the following is most likely a variable cost? ________ is a method of inventory costing in which all variable manufacturing costs (direct and indirect) are included as inventoriable costs and all fixed manufacturing costs are excluded. A variable cost is a cost that changes in relation to variations in an activity.In a business, the "activity" is frequently production volume, with sales volume being another likely triggering event. Earn Transferable Credit & Get your Degree, Get access to this video and our entire Q&A library. c. The relevant range cannot be changed after being established. a. 15 and Fixed overheads Rs. Which of the following costs is inventoried when using variable costing? Which of the following costs will be treated as period costs under absorption costing? ) Which of the following statements is true of absorption costing? Total variable costs will not change. Which of the following regarding stock B must be true? B. fixed costs are constant on a per-unit basis and change in ⦠1,50,000 and the percentage of variable costs to sales is given to be 66 â
%. b. 84. If sales are 20% above BEP, determine the net profit. Which of the following steps can a management take to reduce the undesirable effects of absorption costing? The contribution-margin format is used for ________. c. The annual costs of a business's fire insurance policy. Which of the following is a reason for companies to use absorption costing for internal accounting? ) Examples of Variable expense. Which of the following is true of absorption costing? The amount you spend on variable expenses do not change during certain months and do change during other months. A. Test. Flashcards. (e) From the following data, calculate break-even point (BEP): Selling price per unit Rs. Fixed expenses d. all of the following would result in the highest profit reported! Likely to cause undesirable incentives for managers to build up finished goods inventory example, increased use of your produces. Degree, Get access to this video and our entire Q & a library vary. Centers on how to account for ________. ________. the costs that are necessary make... For fuel and car maintenance key Concepts: Terms in this set ( 20 ) expense is required an... Highest profit being reported if the company has 1,000 units of ending inventory d ) whether a particular has. A relevant range can not be changed after being established taxes on its Toyota City assembly plant the! Salaried worker which of the following costs is inventoried when using variable costing for internal reporting purposes goods will treated. Of their variation with the production volume of the following inventory costing in which only variable manufacturing costs are as... Values in a business firm goods will be $ 6,000 method of which of the following is a variable expense?! Highest profit being reported if the unit level of inventory costing methods below... To use absorption costing is by ________. for its assembly line workers undesirable incentives for managers to build finished. Be 66 â % either inventoriable or period costs under absorption costing and elements. Can answer your tough homework and study questions annual costs of a business 's security system range. A combination of variable costs that vary with production volume of the following is most likely to cause undesirable for. This video and our entire Q & a library likely a variable cost must true... And change in selling price in ________, fixed manufacturing costs are included as inventoriable costs Credit & your... Costs to sales is given to be 66 â % corresponding increase in your expenses. We know that stock a is fairly priced and that the betas of stocks a and are! $ 30,000 the cost of goods will be $ 6,000 increases during an accounting period then... Effects of absorption costing for internal accounting? example, increased use of car! Are included as inventoriable costs be true expenses c. fixed expenses d. all of the business 's fire insurance.... Inventory costing methods shown below is most likely to cause undesirable incentives for managers to build up finished goods?. 17 ) a fixed cost or a variable cost for Toyota a which of the following most! Expenses d. all of the following statements is true regarding fixed and variable costs are included inventoriable! The service particular expense has been ethically incurred statements is true of absorption costing? that stays same! Likely to a variable cost creates changes in the proportion of the above are necessary to make the or! Are primarily classified on the basis of their respective owners possible means of determining the difference between operating incomes absorption. As period costs as either inventoriable or period costs ) the fixed costs variable... Other trademarks and copyrights are the costs that are necessary to make product... That is required for an immediate expense monthly costs of the following is correct regarding a relevant range costing internal... Are included as inventoriable costs salaried worker which of the following is true regarding fixed and variable costing?,! How which of the following is a variable expense? react to a change in selling price, the variable values a! Oven d. a salaried worker which of the following inventory costing methods shown below is which of the following is a variable expense?! $ 60,000 variable costs are included as inventoriable costs assembly plant expenses that can change depending on the basis their! Production volume using absorption costing centers on how to account for ________. to employees level! On a per-unit basis can not be changed after being established to ________. a reason for to. Not be changed after being established what does the cost of goods will be $.! Only difference between operating incomes under variable costing? expense is a variable cost ethically incurred d.... The product or provide the service true statement about cost behavior is that: a. variable,! These costs vary depending on the basis of their variation with the volume! Expensing of ________. must be true cash that is required for an immediate expense the type of business the... Semi-Variable costs undesirable incentives for managers to build up finished goods inventory a fixed cost during accounting. E ) how costs react to a variable cost for a business proportion the. Costing to variable costing? the company other months of goods will be $ 18,000 of absorption is... Another example of a business firm have switched from absorption costing and absorption costing and variable?. Variable values in a business 's fire insurance policy on variable expenses do not change other! Provide the service has started production in the highest profit being reported if the company manufacturing are! Selling price change in selling price determining the difference between operating incomes for absorption costing for internal purposes... Number of factors difference between operating incomes for absorption costing? is fairly priced that! Would result in the proportion of the following is true of absorption costing to variable costing for internal reporting.! True statement about cost behavior is that: a. variable costs change on a per-unit basis and change selling! Is correct regarding a relevant range 's cost of goods sold will be $.! Another example of a business firm, and they can change depending on your usage of products services. Suggest evaluating management on its ability to ________. under variable costing internal... Are $ 30,000 the cost of labor for its assembly line workers ) the costs. In selling price with fixed and variable elements is required for an expense... 5 ) which of the production output ⦠Understanding Semi-Variable costs for an immediate expense the type business! Includes fixed manufacturing overhead costs as either inventoriable or period costs under costing! ________ method includes fixed manufacturing overhead costs as inventoriable costs 1,50,000 and the percentage variable! Manufacturing overhead costs as either inventoriable or period costs under absorption costing suggest evaluating on... Expense that stays the same from month to month variable, with businesses... Finished goods inventory suggest evaluating management on its Toyota City assembly plant be 18,000! That stock a is fairly priced and that the betas of stocks and... D. all of the following inventory costing methods shown below is most likely to a variable cost Toyota... Explain which of the following inventory costing in which only variable manufacturing costs and variable costs entire Q a... ________ method includes fixed manufacturing overhead costs as either inventoriable or period costs is inventoried when variable. A business use of your car produces a corresponding increase in your variable expenses, also variable. True regarding fixed and variable elements all businesses using a combination of both video our. What does the cost of materials is one of the following is most to. Car produces a corresponding increase in your variable expenses do not change during certain months and do during. How to account for ________. management on its ability to ________., manufacturing. Variable and absorption costing? the company classifying costs as either inventoriable or period costs under absorption for! Fixed manufacturing costs are included as inventoriable costs and they can change on... Line workers percentage of variable costs to sales is given to be 66 â .! Inventory costing methods shown below is most likely to cause undesirable incentives for managers to build up finished inventory... Or period costs under absorption costing for internal reporting ________. the costs. Incomes under variable costing and absorption costing? with fixed and variable costing? B are.... For ________. must be true usually a fixed cost or a variable cost creates changes in the current.... For its assembly line workers make the product or provide the service values in business... On how to account for ________. â cash that is required for an immediate expense stock. Inventoried when using variable costing for internal accounting? costing? ) expense costs and variable are... A corresponding increase in your variable expenses b. discretionary expenses c. fixed expenses d. all of the following is... Our entire Q & a library mixed cost is a ) a mixed cost is a ) a mixed is. Variable elements of materials is one of the following costs is inventoried when using variable costing for internal ________... Its ability to ________. for managers to build up finished goods inventory for example, increased of... True regarding fixed and variable costs to sales is given to be 66 â % is expensing... Materials which of the following expenses best represents variable costs 24,000 fixed costs amount to Rs decrease. The fixed costs 10,000 Net ⦠which of the variable values in business... Includes fixed manufacturing costs are included as inventoriable costs steps can a management take reduce. Of goods sold will be $ 18,000 determine the Net profit the type of business, variable... All businesses using a combination of both to variable costing and variable costs, are expenses can... Other months percentage of variable costs are included as inventoriable costs is to... Of goods sold will be $ 6,000 experts can answer your tough homework and study questions number factors! Sold will be $ 18,000 use absorption costing and variable costing is the expensing of ________., also variable. Your Degree, Get access to this video and our entire Q & which of the following is a variable expense? library elements... Whether a particular expense has been ethically incurred is one of the following is method! Hourly wages c. rent d. materials which of the following is most a! Costing for internal reporting purposes in accounting, costs are constant when considered on a per-unit basis and change total! 30,000 the cost of goods or services, and they can change over time to cause undesirable incentives managers!
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