The absorption costing format is required for external reporting.

True or False

Lean manufacturing (JIT, just-in-time) entails larger production runs so that economies of scale are developed.

True or False

Operating income is affected by changes in production under variable costing.

True or False

Whether absorption costing or variable cost is used, selling and administrative costs are treated as period costs and deducted

True or False

Absorption costing treats all manufacturing costs as product costs, whether they are variable or fixed.

True or False

The difference in ending inventory balances and operating income under variable costing and absorption costing occurs because there is fixed manufacturing overhead in ending inventory balances under the absorption costing approach.

True or False

Under variable costing, only those manufacturing costs that vary with output are treated as product costs.

True or False

Fixed manufacturing overhead costs can be deferred in inventory, rather than treated as a period expense, under the variable costing approach.

True or False

Costs under both income statement formats (absorption and variable costing formats) are classified as product or period costs.

True or False

The variable costing income statement format shows costs separated by cost behaviour rather than function.

True or False

The absorption costing format is best for internal decision-making.

True or False

The difference in ending inventory balances and operating income under variable costing and absorption costing occurs because there is fixed manufacturing overhead in ending inventory balances under the variable costing approach.

True or False

If there is no change in inventories, there will be no difference between absorption costing operating income and variable costing operating income.

True or False

Lean manufacturing entails larger production runs so that economies of scale are developed.

True or False

Operating income is affected by changes in production under absorption costing.

True or False