PLZ ANSWER ALL QUESTION 1 Income computed by the absorption

PLZ ANSWER ALL QUESTION.

1. Income computed by the absorption costing method will tend to exceed income computed by the variable costing method if O Fixed manufacturing costs decrease O Units sold exceed units produced O Variable manufacturing costs decrease O Units produced exceed units sold 2. Company A is incurring $2,500 as overheads in manufacturing 500 units. The overheads are allocated on the basis of machine hours which is 250 hours. How much overheads will be incurred when the company is manufacturing 700 units and taking 300 hours? O 3000 O 3500 O 2500 4000 3. What is the difference between FIFO Method and Weighted Average Method while calculating equivalent units? O No difference O Difference in calculation of opening inventory O Difference in calculation of ending inventory O None 4. The manager of Wong\'s Food Express estimates operating costs for the year will total $300,000 for fixed costs. 28 Find the sales dollars required with a contribution margin ratio of 40 percent to generate a profit of $100,000 O 750000 O 1200000 O 1000000 O 400000 5. Vriable Costing is also called as O Absorption Costing O Contribution Costing O Fixed Costing O Marginal Costing

Solution

Solution:(1): Option(d) is correct i.e. Units produced exceed units sold.

Explanation: When the units produced exceed the units sold, absorption costing income tends to be higher than variable costing income. It happens because some of the fixed Manufacturing costs are allocated to unsold inventory at the end of the period, whereas, with variable costing all such costs would be expressed in the period incurred.

Solution:(2): Option(a) i.e. $3,000 is correct

Explanation: Total overhead incurred= $2,500

   Total machine hours= 250 hours

Therefore, total overhead when the company is Manufacturing 700 units and taking 300 hours

= (2,500*300)/250 = $3,000

Solution:(3): Option(c) is correct i.e. Difference in calculation of ending inventory.

Explanation: When FIFO method is used, it keeps the costs of the last period and the current period seperate from each other. The weighted average process of costing combines the work and the costs for the two periods(the last and the current period) and computes a single cost. Due to the difference in approach of calculating equivalent units we can find differences in the value of ending inventory.

Solution:(4): Option(c) is correct i.e. $1,000,000

Explanation: Required sales(in dollars),

= (Fixed cost + profit)/contribution margin%

= (300,000+100,000)/40% = $1,000,000

Solution:(5): Option(d) is correct i.e. Marginal costing

Variable costing is also known as Marginal costing.