Final Exam Study

Question 1

absorption costing

Answer 1

Assigns all manufacturing costs to units as product costs
Direct materials, direct labour, variable manufacturing overhead, fixed manufacturing overhead.

Question 2

Variable costing

Answer 2

Only variable manufacturing costs are included as product costs
Direct materials, direct labour, variable manufacturing overhead.

Question 3

Absorption costing income sheet

Answer 3

Sales - COGS= gross margin - selling and admin expense = operating income

Question 4

Variable costing income sheet

Answer 4

Sales- cogs - variable expenses = contribution margin- fixed expenses = operating income

Question 5

Master budget

Answer 5

Sales, purchases, operating expenses, cash (all budgeted), budgeted income statement and balance sheet.

Question 6

Sales budget; Credit sales, percentage paid in first and second month

Answer 6

40% in the first month and 60% in the second

Question 7

Constrained resources steps

Answer 7

1. Calculate contribution margin per unit
2. Constrained resources per unit
   3 divide step 1 by step 2