36. In a standard cost system, the manufacturing overhead allocated to production equals the standard overhead allocation rate multiplied by the standard quantity of the allocation base allowed for expected output.

True

False

37. The direct materials cost and efficiency variances make up the total direct materials variance.

True

False

41. Which of the following statements is true of absorption costing?

A) It considers variable selling and administrative costs as product costs.

B) It considers fixed selling and administrative costs as product costs.

C) It considers fixed manufacturing overhead cost as product costs.

D) It considers variable manufacturing overhead cost as period costs.

42) Which of the following is true of the traditional format of the income statement?

A) It is prepared under the variable costing method.

B) It shows contribution margin as a line item.

C) It is not allowed under GAAP.

D) It is prepared under the absorption method.

43) Unit product cost calculations using absorption costing do not include ________.

A) fixed manufacturing overhead

B) variable manufacturing overhead

C) variable selling and administrative costs

D) direct materials