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Chapter 6 practice questions
Terms in this set (6)
Variable manufacturing overhead costs are treated as period costs under both absorption and variable costing.
When reconciling variable costing and absorption costing net operating income, fixed manufacturing overhead costs deferred in inventory under absorption costing should be added to variable costing net operating income to arrive at the absorption costing net operating income.
When production is less than sales for the period, absorption costing net operating income will generally be less than variable costing net operating income.
Assuming that a segment has both variable expenses and traceable fixed expenses, an increase in sales should increase profits by an amount equal to the sales times the segment margin ratio.
The salary paid to a store manager is a traceable fixed expense of the store.
A segment is any portion or activity of an organization about which a manager seeks revenue, cost, or profit data.
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