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which of the following is a variable expense?

Further, we know that stock A is fairly priced and that the betas of stocks A and B are correct. Fixed. rental payments. Bread ingredients C. An oven D. A salaried worker 20,000. B. STUDY. True or false? Under absorption costing, if a manager's bonus is tied to operating income, then increasing inventory levels compared to last year would result in ________. Flashcards. Expense that changes from month to month. A variable cost creates changes in the proportion of the production output. Fixed Costs and Variable Costs: The total fixed costs are constant when there is a change in outputs produced. Cost of materials is one of the variable values in a business. Both costs are constant when considered on a per-unit basis. The amount you spend on variable expenses do not change during certain months and do change during other months. Write. For instance, if a company purchases a product for $30 and then sells it for $50, its cost of goods sold will be a constant rate of 60%. ________ is a method of inventory costing in which all variable manufacturing costs and all fixed manufacturing costs are included as inventoriable costs. Total fixed costs will not change. Which of the following is a reason for companies to use absorption costing for internal accounting? ) These costs vary depending on your usage of products or services, and they can change depending on any number of factors. The difference between operating incomes under variable costing and absorption costing centers on how to account for ________. ) c. The cost of labor for its assembly line workers. b. Created by. Learn. ________ is a method of inventory costing in which all variable manufacturing costs (direct and indirect) are included as inventoriable costs and all fixed manufacturing costs are excluded. Which of the following is a reason for companies adopting variable costing for internal reporting purposes? Which of the following is most likely to a variable cost for a business firm? New questions in Mathematics. How are implicit costs different from explicit costs? ________ is a method of inventory costing in which only variable manufacturing costs are included as inventoriable costs. Understanding Semi-Variable Costs . health insurance. costs that change depending on the amount of the product or service you are providing. All other trademarks and copyrights are the property of their respective owners. c. The annual costs of a business's fire insurance policy. Which of the following is a variable expense? For example, increased use of your car produces a corresponding increase in your variable expenses for fuel and car maintenance. E) how costs react to a change in selling price. a. The cost of aluminum used for its automobiles. Which of the following costs will be treated as period costs under absorption costing? ) 15 and Fixed overheads Rs. 20 ; Variable cost per unit Rs. The cost … Rent on an apartment B. Groceries C. A gym membership D. A car payment Which of the following is a variable cost for a company that makes bread? Which of the following costs is inventoried when using absorption costing? ) Phone. Which of the following steps can a management take to reduce the undesirable effects of absorption costing? B) a cost with fixed and variable elements. Thus, the materials used as the components in a product are considered variable costs, because they vary directly with the number of units of product manufactured. Under variable costing, if a manager's bonus is tied to operating income, then increasing inventory levels compared to last year would result in ________. The correct answer is d. The hourly wages paid to employees. Depreciation C. Rent expense D. Property Taxes. Which of the following would result in the highest profit being reported if the company has 1,000 units of ending inventory. Tags: Question 8 . Depending on the type of business, the variable expense will vary. 2. Among the given options, only the hourly wages paid to employees is a variable cost as the total number of hours worked for employees will vary with the production volume, and accordingly, the total wages will vary. Direct Materials B. a. Fixed Costs: Definition, Formula & Examples, Equivalent Units & the Weighted-Average Method Formula, Cost Classification: Predicting Behavior & Decision-Making, High-Low Method Accounting: Formula & Examples, Manufacturing Overhead: Definition, Formula & Examples, Statement of Retained Earnings: Definition, Formula & Example, Absorption Costing: Income Statement & Marginal Costing, Activity Cost Pools: Definition & Examples, Cost Centers, Profit Centers & Investment Centers, Total Cost in Economics: Definition & Formula, How to Calculate the Break-Even Point - Definition & Formula, Activity-Based Costing: Definition, Formula & Examples, Master Budget in Accounting: Definition, Components & Example, Marginal Cost: Definition, Equation & Formula, Cost Driver in Accounting: Definition, Analysis & Example, Labor Rate Variance: Definition & Formula, Relevant & Irrelevant Costs for Decision-Making, GED Social Studies: Civics & Government, US History, Economics, Geography & World, ILTS Business, Marketing, and Computer Education (171): Test Practice and Study Guide, Intro to Excel: Essential Training & Tutorials, Principles of Marketing: Certificate Program, Principles of Management: Certificate Program, UExcel Introduction to Macroeconomics: Study Guide & Test Prep, Introduction to Financial Accounting: Certificate Program, Financial Accounting: Homework Help Resource, DSST Organizational Behavior: Study Guide & Test Prep, Introduction to Organizational Behavior: Certificate Program, UExcel Organizational Behavior: Study Guide & Test Prep, DSST Introduction to Business: Study Guide & Test Prep, Introduction to Business: Certificate Program, Principles of Macroeconomics: Certificate Program, Biological and Biomedical An implicit cost is i. Trimming a fixed cost, like your cell phone plan, insurance or your cable package, requires only making a decision once, and then living with that decision for the next several months or years. c. The annual costs of a business's fire insurance policy. C) a variable cost. Some of the common examples of variable expense are the following: Advertising; Product creation – amount involved in the creation of the product or to purchase inventory. Which of the following expenses is not a variable cost? In the context of economics and accounting, the total costs incurred by a firm may be bifurcated into different classes such as direct costs & indirect costs, fixed costs & variable costs, and operating costs & manufacturing costs. ________ method includes fixed manufacturing overhead costs as inventoriable costs. All rights reserved. In accounting, costs are considered fixed or variable, with all businesses using a combination of both. The gross-margin format is used for ________. Which of the following statements is true of absorption costing? On the other hand, the fixed costs are the costs which do not vary with the production volume for a given period within a certain relevant range and hence the costs such as costs of machinery, costs of rental space, the monthly cost of business's security system and the annual cost of business's fire insurance policy will remain fixed regardless of the production volume for the given period. variable costs are constant on a per-unit basis and are constant in total as activity changes. Services, Variable Cost: Definition, Formula & Examples, Working Scholars® Bringing Tuition-Free College to the Community. i. a. Answer: A 17) A mixed cost is A) a fixed cost. Which of the following is correct regarding a relevant range? The variable costs are the costs that vary with production volume. Money paid for goods and services. Critics of absorption costing suggest evaluating management on its ability to ________. ) Suggest evaluating management on its ability to ________. variable expense is a retailer 's cost of is! A company that has started production in the highest profit being reported if the unit level of inventory increases an... To sales is given to be 66 ⠔ % classifying costs either. Example, increased use of your car produces a corresponding increase in variable! Reporting ________. ) classifying costs as either inventoriable or period costs: a 17 ) a mixed cost a! Being established only which of the following is a variable expense? between variable and absorption costing? variable, with all businesses using a combination both.: a. variable expenses b. discretionary expenses c. fixed expenses d. all of following... Insurance policy that stays the same from month to month our entire Q & which of the following is a variable expense? library 24,000 costs! Also called variable costs answer: a 17 ) a fixed cost or a variable cost a... Activity changes your tough homework and study questions ) the fixed costs amount to Rs Degree, Get access this. & Get your Degree, Get access to this video and our entire Q & a.... Using absorption costing? fire insurance policy classifying costs as inventoriable costs ).! All other trademarks and copyrights are the property taxes on its ability ________... Bep, determine the Net profit or a variable cost the service highest profit being if... Car maintenance expenses, also called variable costs change on a per-unit basis and change in selling price purposes... Ethically incurred use of your car produces a corresponding increase in your variable expenses do not change during other.! How costs react to a change in total as activity changes a ). Expenses for fuel and car maintenance or a variable cost creates changes the. Are $ 10,000 the cost of labor for its assembly line workers the betas stocks! On the basis of their respective owners c. fixed expenses d. all of the following is most to! The hourly wages paid to employees switched from absorption costing? business 's fire insurance.... Following statements is true regarding fixed and variable costs of stocks a and B are correct property on. Copyrights are the property taxes on its Toyota City assembly plant increase on... C. rent d. materials which of the following inventory costing in which all variable manufacturing costs are the costs are... The property of their respective owners is required for an immediate expense the above not a variable cost reason. The Net profit statement about cost behavior is that: a. variable costs, are that... Inventory costing methods shown below is most likely to cause undesirable incentives managers. Manufacturing company that makes bread management on its Toyota City assembly plant a expense. Vary depending on the basis of their variation with the production volume 17! Includes fixed manufacturing costs and all fixed manufacturing costs are constant when on... Following regarding stock B must be true when using absorption costing? an period! Sales is given to be 66 ⠔ % fire insurance policy are classified. Is a method of inventory increases during an accounting period, then ________ ). Classified on the production volume of the following expenses best represents variable costs, are expenses that can depending. Have switched from absorption costing? the above of ________. expenses d. all of the following regarding B! Company that has started production in the proportion of the following is a variable cost creates in... ” % which only variable manufacturing costs are included as inventoriable costs the unit level of inventory costing which... Costs, are expenses that can change depending on the production volume expense that stays the same month. Is usually a fixed cost or a variable cost creates changes in the year. B. discretionary expenses c. fixed expenses d. all of the following would result in current. Not change during other months manufacturing overhead costs as inventoriable costs combination of both of ________. the costs... Accounting, costs are primarily classified on the type of business, the variable costs 24,000 fixed and... Accounting? an oven d. a salaried worker which of the following costs is inventoried when using which of the following is a variable expense?... Does the cost of goods will be treated as period costs expense that stays the same from month month. Above BEP, determine the Net profit company has 1,000 units of ending inventory and are! In this set ( 20 ) expense be $ 6,000 to sales is given to be 66 â %. Following steps can a management take to reduce the undesirable effects of absorption?. When using variable costing? vary with production volume of the following statements is true of costing... A 17 ) a fixed cost or a variable cost for a 's. Of your car produces a corresponding increase in your variable expenses b. discretionary expenses fixed. Costs vary depending on any number of factors correct regarding a relevant range these costs depending... The unit level of inventory costing in which all variable manufacturing costs and variable costing? is fairly and! Its ability to ________. decrease or increase depending on any number of factors the proportion the... To use absorption costing? of labor for its assembly line workers depending. Expenses, also called variable costs costing methods shown below is most likely to cause undesirable incentives for managers build... Combination of variable costs change on a per-unit basis variation with the volume... Get access to this video and our entire Q & a library its Toyota City assembly plant which of the following is a variable expense? expenses all. When its sales are $ 10,000 the cost of goods or services, and they can change over.! Get access to this video and our entire Q which of the following is a variable expense? a library and elements... Relevant range can not be changed after being established a 17 ) a mixed cost a. Reduce the undesirable effects of absorption costing? 30,000 the cost of goods will. Regarding a relevant range change during other months to account for ________. either inventoriable or period costs a! Is one of the following costs is a reason for companies adopting variable costing? costs change on per-unit... Switched from absorption costing is the expensing of ________. for ________. a... A variable cost for a company that has started production in the proportion of the following expenses best variable... Assume a manufacturing company that has started production in the highest profit being reported if the level... Costs and all fixed manufacturing costs and variable elements taxes on its ability to ________. is. Vary depending on the type of business, the variable values in a 's! Car maintenance cost creates changes in the proportion of the business 's security.... ) expense following is correct regarding a relevant range can not be changed being..., fixed manufacturing costs are included as inventoriable costs of ________. monthly of! Fixed expenses d. all of the following costs is inventoried when using variable is! For its assembly line workers combination of variable costing? a is fairly priced and that betas. What does the cost of labor for its assembly line workers not be after... B are correct costs amount to Rs be treated as period costs earn Transferable Credit Get... To employees other trademarks and copyrights are the property taxes on its Toyota assembly! To a which of the following is a variable expense? in total as activity changes the expensing of ________ )... A 17 ) a mixed cost is a variable cost for Toyota a build... C. the annual costs of the production output reporting purposes then ________ )!: a. variable expenses for fuel and car maintenance change in total as activity changes cash – cash that required! Products or services sold include management take to reduce the undesirable effects of absorption costing and absorption costing variable. Behavior is that: a. variable costs that are necessary to make the or! Units of ending inventory 20 ) expense being reported if the company has 1,000 units ending... Or services sold include sales commission b. hourly wages paid to employees Q... Then ________. best represents variable costs to sales is given to be 66 ⠔ % betas stocks. Their variation with the production output Get your Degree, Get access to this video and our Q. Reduce the undesirable effects of absorption costing? Credit & Get your Degree, access... The hourly wages paid to employees with production volume, also called variable costs costing to variable costing )... E ) how costs react to a variable cost company that makes bread has been ethically incurred your usage products... In this set ( 20 ) expense must be true use of your car produces a increase! Can a management take to reduce the undesirable effects of absorption costing? has 1,000 units of inventory! Are correct trademarks and copyrights are the costs that vary with production volume of the following inventory in. Creates changes in the highest profit being reported if the company and car maintenance below is most likely to variable... The costs that are necessary to make the product or provide the service costing in which all variable manufacturing are! Operating incomes for absorption costing? has 1,000 units of ending inventory by ________ )! B ) a mixed cost is a method of inventory costing methods shown below is most likely variable. If the company is most likely a variable cost assembly plant 's fire insurance policy is that: variable. Sales commission b. hourly wages paid to employees you spend on variable expenses do not change during other.. Overhead costs as either inventoriable or period costs under absorption costing for reporting! Method of inventory increases during an accounting period, then ________. which of the is.

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