Multiple Choice Questions Which of the following is normally included in product cost under the variable costing method? Direct materials cost, direct labour cost, but NOT manufacturing overhead cost Prime cost but NOT conversion cost. Prime cost and all conversion cost. Direct materials cost, direct labour cost, and variable manufacturing overhead cost Operating income determined using absorption costing can be reconciled to operating income determined using variable costing by computing the difference between which of the following? Fixed manufacturing overhead costs are deferred in or released from inventories Gross ma (absorption costing method) and contribution margin (variable costing method). Sales as recorded under the variable costing method and sales as recorded under the absorption costing method Discretionary costs included in the beginning and ending inventories During the most recent year, Evans Company had an operating income of S90,000 using absorption costing and $84,000 using variable costing The fixed manufacturing overhead application rate was $6 per unit. There were no beginning inventories. If 15,000 units were produced last year, what were the sales in units for last year? 26,000 units. 12,000 units. 14,000 units. 15,000 units. What is a continuous (or perpetual) budget? It is a strategic plan that does not change. It is prepared for a range of activities so that the budget can be adjusted for changes in activity. It is used in companies that experience no change in sales, It is a plan that is updated monthly or quarterly. dropping one period and adding another. Walsh Company expects sales of Product W to be 50,000 units in April 30,000 units in May, and 70.000 units in June. The moderne har the insentory on hand at