Question

QUESTION 1 Total production overhead is treated as a product cost when using A. Absorption or "Full" costing B. Throughput costing C. Throughput costing and absorption costing D. Variable costing 1 points QUESTION 2 Some companies use throughput costing for internal purposes because A. They believe only direct materials costs are truly variable in the short run B. They believe direct labor costs are fixed in the short run C. They believe all overhead costs are fixed in the short run D. All of the above 1 points QUESTION 3 Barry's Hobbies produces and sells a luxury animal pillow for $80.00 per unit. In the first month of operation, 3,000 units were produced and 2,250 units were sold. Actual fixed costs are the same as the amount budgeted for the month. Other information for the month includes: Variable manufacturing costs $38 per unit Variable marketing costs $ 2 per unit Fixed manufacturing costs $60,000 per month Administrative expenses, all fixed $12,000 per month Ending inventories: Direct materials -0- WIP -0- Finished goods 750 units What is cost of goods sold per unit when using absorption costing?

Answer 1

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1 Total production overhead is treated as a product cost when using
A. Absorption or "Full" costing B
2 Some companies use throughput costing for internal purposes because
A. They believe only direct materials costs are truly variable in the short run
Answer 3	Amount $
Fixed manufacturing costs	60,000.00
Units produced	3,000.00
Fixed manufacturing cost per unit	20.00
Add: Variable manufacturing cost per unit	38.00
Cost of goods sold per unit	58.00