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Absorption Costing treats all manufacturing costs and selling costs as product costs, regardless of whether they...

Absorption Costing treats all manufacturing costs and selling costs as product costs, regardless of whether they are fixed or variable. T/F

When units produced = units sold, Absorption costing net operating income < Variable costing net operating income. T/F

When determining the units to which costs will be assigned in Equivalent Units, the beginning WIP units + units started into production = units completed and transferred out + ending WIP units. T/F

When calculating Equivalent units, Conversion costs include Direct Labor and Manufacturing Overhead. T/F

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Expert Solution

Number Transaction True / False  
1 Absorption Costing treats all manufacturing costs and selling costs as product costs, regardless of whether they are fixed or variable False  
In Absorption costing only manufacturing cost is treated as product cost wheter fixed or variable
2 When units produced = units sold, Absorption costing net operating income < Variable costing net operating income. False  
When units produced = unit sold than net income under both the method is the same
3 When determining the units to which costs will be assigned in Equivalent Units, the beginning WIP units + units started into production = units completed and transferred out + ending WIP units. False  
4 When calculating Equivalent units, Conversion costs include Direct Labor and Manufacturing Overhead. T/F True  

ekkarill92 answered 2 years ago
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