1. Which product-costing system expenses fixed manufacturing costs as they occur? A. Absorption-costing B. Variable-costing C. Production-costing D. Activity-based costing

2. Which type of income statement includes fixed manufacturing overhead incurred during the time period in the cost of goods manufactured? A. An absorption-costing income statement B. A variable-costing income statement C. An internal-reporting income statement D. None of the above

3. Production costs for 20,000 units sold at $15 each: Direct materials $20,000 Direct labor $80,000 Variable overhead $60,000 Fixed overhead $90,000 Assume there is no beginning or ending finished goods or work-in-process inventories. What is the gross margin, under an absorption costing income statement? A. $280,000 B. $200,000 C. $50,000 D. $110,000 4. Consider the following: Sales price, per unit $18 per unit Standard absorption cost rate $12 per unit Standard variable cost rate $8 per unit Variable selling expense rate $2 per unit Fixed selling and administrative expenses $40,000 Fixed manufacturing overhead $60,000 Last period, 13,000 units were produced. In the current period, 15,000 units were produced. In each period, 13,000 units were sold. What is the difference in reported income under absorption and variable costing for the current period? A. The variable-costing income exceeded absorption-costing income by $4,000 B. The absorption-costing income exceeded variable-costing income by $8,000 C. The variable-costing income exceeded absorption-costing income by $6,000 D. The absorption-costing income exceeded variable-costing income by $12,000

5. Production costs for 10,000 units sold at $45 per unit: Direct materials $20,000 Direct labor $80,000 Variable overhead $60,000 Fixed overhead $90,000 Variable selling and administrative costs $40,000 Fixed selling and administrative costs $80,000 Total costs $370,000 What is the difference in net income between absorption-costing and variable-costing income statements, assuming there is no ending or beginning inventory? A. $80,000 B. $170,000 C. $90,000 D. No difference