Variable costing is acceptable for which of the following purposes?

A) IFRS (international) reporting

B) Internal (managerial) reporting

C) GAAS (audit) reporting

D) IRS (tax) reporting

E) GAAP (external) reporting

When implementing activity-based costing, by how much will company-wideprofit before taxes differ compared to a traditional cost allocation system?

A) ABC systems will report lower profit than a traditional costing system.

B) The difference depends on which traditional costing system is used.

C) No difference will occur in the amount of profit between ABC and a traditional costing system.

D) ABC systems will report higher profit than a traditional costing system.

XYZ Company manufactures several different products. In its traditional costing system, overhead costs are allocated based on a predetermined rate using direct labor hours as the basis. The company recently switched to an activity-based costing system using different cost drivers for each of their two activities. Information is as follows:

Estimated Activity		Predetermined Overhead Rate
Labor hours:	100,000		$12 per labor hour
Number of designs:	6,000		$32 per design

Job #16 required 22 labor hours and 3 designs. What would be the cost of Job #16 under the traditional costing system?

A) $360.00

B) $306.24

C) $42.24

D) $264.00

E) $484.00

Which of the following equations will reconcile the difference between absorption and variable costing?

A) Income reported under absorption costing - Fixed manufacturing costs + Total selling and administrative costs = Income reported under variable costing

B) Income reported under absorption costing - Total variable manufacturing costs = Income reported under variable costing

C) Income reported under variable costing + Fixed manufacturing costs in ending inventory - Fixed manufacturing costs in beginning inventory = Income reported under absorption costing

D) Income reported under variable costing - Total selling and administrative costs + Fixed manufacturing costs = Income reported under absorption costing

E) Income reported under absorption costing + Fixed manufacturing costs in ending inventory - Fixed manufacturing costs in beginning inventory = Income reported under variable costing

The XYZ Corporation has the following data for 2023:

Selling price per unit	$15
Variable cost per unit	$9
Fixed costs	$45,000
Units sold	10,000 units

The margin of safety in units will be:

A) 7,500

B) 667

C) 2,500

D) 10,000

E) 4,000

The fundamental principle of GAAP that requires firms to recognize costs in the same period in which the associated revenue occurs is referred to as the:

A) Conservatism.

B) Historical cost principle.

C) Matching principle.

D) Going concern.

E) Revenue recognition principle.

Which of the following would likely be the most accurate cost driver to use for allocating the costs associated with a company's engineering department?

A) Direct labor dollars

B) Number of customers

C) Machine hours

D) Number of designs developed

XYZ Corporation has provided the following data from its activity-based costing system:

Activity Cost Pool	Total Cost	Total Activity
Assembly	$477,900	29,500	machine-hours
Packaging	$35,400	1,200	orders
Shipping	$45,778	748	shipments

Data concerning one of the company's products appear below:

Selling price per unit	$189.50
Direct materials cost per unit	$41.59
Direct labor cost per unit	$38.21
Annual unit production and sales	280
Annual machine-hours	405
Annual orders	62
Annual shipments	7

According to the activity-based costing system, the annual product margin for this product is:

A) $30,609

B) $24,155

C) $30,716

D) $21,898

The income statement for XYZ Manufacturing Company for 2023 is as follows:

Sales (10,000 units)	$120,000
Variable expenses	72,000
Contribution margin	$ 48,000
Fixed expenses	36,000
Operating income	$ 12,000

If sales increase by 1,000 units, what will happen to pre-tax operating income?

A) increase by $4,800

B) stays the same

C) increase by $7,200

D) increase by $1,200

E) increase by $720

The XYZ Company provides the following information:

Sales (200,000 units)	$500,000
Manufacturing costs:
Variable	170,000
Fixed	30,000
Selling and administrative costs:
Variable	80,000
Fixed	20,000

What is the break-even point in units for XYZ?

A) 100,000 units

B) 250,000 units

C) 33,334 units

D) 40,000 units

E) 200,000 units