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which of the following is a variable expense?

If the unit level of inventory increases during an accounting period, then ________. Write. Gift Gallery sold 2,000 zooglars during 2010. variable costs are constant on a per-unit basis and are constant in total as activity changes. 20 ; Variable cost per unit Rs. A variable cost creates changes in the proportion of the production output. b. Expense that stays the same from month to month. Which of the following is a variable expense? The cost … All rights reserved. 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. Match. 1. All other trademarks and copyrights are the property of their respective owners. One possible means of determining the difference between operating incomes for absorption costing and variable costing is by ________. Which of the following is a reason for companies to use absorption costing for internal accounting? ) The cost of aluminum used for its automobiles. Which of the following expenses best represents variable costs? Which of the following regarding stock B must be true? Which of the following statements is true of absorption costing? d. The relevant range will remain the same as long Sciences, Culinary Arts and Personal e. The monthly costs of the business's security system. Variable expenses, also called variable costs, are expenses that can change over time. Rent on an apartment B. Groceries C. A gym membership D. A car payment 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%. Which of the following expenses is not a variable cost? New questions in Mathematics. How are implicit costs different from explicit costs? Cost of shipping products 8. Which of the following is true of absorption costing? In accounting, costs are considered fixed or variable, with all businesses using a combination of both. Depreciation C. Rent expense D. Property Taxes. The costs of machinery. What are Variable Costs? Learn. Money paid for goods and services. Sales $60,000 Variable Costs 24,000 Fixed Costs 10,000 Net … Understanding Semi-Variable Costs . Which of the following costs will be treated as period costs under absorption costing? ) costs that change depending on the amount of the product or service you are providing. Gravity. b. a. Our experts can answer your tough homework and study questions. Created by. E) how costs react to a change in selling price. Variable Expense. Flashcards. Which of the following steps can a management take to reduce the undesirable effects of absorption costing? B. (f) The fixed costs amount to Rs. 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. Earn Transferable Credit & Get your Degree, Get access to this video and our entire Q&A library. Information is provided concerning the zooglar product. Critics of absorption costing suggest evaluating management on its ability to ________. ) The correct answer is d. The hourly wages paid to employees. Under absorption costing, if a manager's bonus is tied to operating income, then increasing inventory levels compared to last year would result in ________. ________ is a method of inventory costing in which all variable manufacturing costs and all fixed manufacturing costs are included as inventoriable costs. (e) From the following data, calculate break-even point (BEP): Selling price per unit Rs. Which of the following would result in the highest profit being reported if the company has 1,000 units of ending inventory. a. sales commission b. hourly wages c. rent d. materials 2 See answers thegreatandpowe thegreatandpowe The answer is c. Rent abreen609 abreen609 The correct answer is rent. ________ is a method of inventory costing in which only variable manufacturing costs are included as inventoriable costs. Direct Materials B. D) always an indirect cost. 20,000. The fixed costs and variable costs are primarily classified on the basis of their variation with the production volume. Variable costs are expenses that vary in proportion to the volume of goods Inventory Inventory is a current asset account found on the balance sheet, consisting of all raw materials, work-in-progress, and finished goods that a company has accumulated. a. PLAY. Fixed Expense. c. The annual costs of a business's fire insurance policy. health insurance. Unfortunately, variable costs are also some of the toughest expenses to cut back on, because doing so requires a daily commitment to frugal decision-making. 84. 5) Which of the following costs is a variable cost? a. variable expenses b. discretionary expenses c. fixed expenses d. all of the above. Assume a manufacturing company that has started production in the current year. ________ 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. C) a variable cost. Under variable costing, if a manager's bonus is tied to operating income, then increasing inventory levels compared to last year would result in ________. NEW! Find GCSE resources for every subject. rental payments. Which of the following is a variable expense? Phone. Fixed Costs and Variable Costs: The total fixed costs are constant when there is a change in outputs produced. A) rental expense for factory building for manufacturer of electronics B) lease cost for factory machine for manufacturer of electronics C) fuel for airplane for airline D) depreciation expense of airplane for airline Which of the following is correct regarding a relevant range? 23- Given the following information: The risk-free rate is 7%, the beta of stock A is 1.2, the beta of stock B is 0.7, the expected return on stock A is 13.5%, and the expected return on stock B is 11%. Expense that changes from month to month. Cost of materials is one of the variable values in a business. Which of the following statements is true regarding fixed and variable costs? Which of the following expenses best represents variable costs? Further, we know that stock A is fairly priced and that the betas of stocks A and B are correct. Student loan payments. Key Concepts: Terms in this set (20) Expense. If sales are 20% above BEP, determine the net profit. These costs vary depending on your usage of products or services, and they can change depending on any number of factors. i. The only difference between variable and absorption costing is the expensing of ________. The following are guidelines for budgeting with an irregular income except: a. prioritize the list in order of importance b. make a list of all of your expenses for the month ahead c. The annual costs of a business's fire insurance policy. Another example of a variable expense is a retailer's cost of goods sold. A variable cost is a cost that changes in relation to variations in an activity.In a business, the "activity" is frequently production volume, with sales volume being another likely triggering event. 15 and Fixed overheads Rs. answer choices . Total fixed costs will not change. Fixed. a. B) a cost with fixed and variable elements. Bread ingredients C. An oven D. A salaried worker The costs of rental space. The variable costs are the costs that vary with production volume. The fixed portion of a semi-variable cost is incurred no matter the activity volume, while the variable portion occurs as a … A. In ________, fixed manufacturing costs are included as inventoriable costs. Which of the following is most likely to a variable cost for a business firm? Total variable costs will not change. Which of the following is a variable cost for a company that makes bread? flynnj6. What are implicit costs? Which of the following costs is inventoried when using absorption costing? ) Which of the following is a reason for companies adopting variable costing for internal reporting purposes? The gross-margin format is used for ________. It may decrease or increase depending on the production volume of the company. 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. Many companies have switched from absorption costing to variable costing for internal reporting ________. A. Cash – Cash that is required for an immediate expense. The property taxes on its Toyota City assembly plant. Which of the following costs is inventoried when using variable costing? When the sales are $30,000 the cost of goods sold will be $18,000. Cost Of Labor: The cost of labor is the sum of all wages paid to employees, as well as the cost of employee benefits and payroll taxes paid by an employer. A nonmonetary opportunity cost b. Rent is usually a fixed cost as … © copyright 2003-2020 Study.com. A. 1,50,000 and the percentage of variable costs to sales is given to be 66 ⅔%. c. The cost of labor for its assembly line workers. Depending on the type of business, the variable expense will vary. 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. Which of the following expenses is not a variable cost? ________ method includes fixed manufacturing overhead costs as inventoriable costs. 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 Tags: Question 8 . the combination of variable costs that are necessary to make the product or provide the service. Test. The true statement about cost behavior is that: A. variable costs change on a per-unit basis and change in total as activity changes. Hence when its sales are $10,000 the cost of goods will be $6,000. The amount you spend on variable expenses do not change during certain months and do change during other months. Examples of Variable expense. Both costs are constant when considered on a per-unit basis. Spell. Fixed or Variable Expenses. For example, increased use of your car produces a corresponding increase in your variable expenses for fuel and car maintenance. The rent for a warehouse B. 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. The difference between operating incomes under variable costing and absorption costing centers on how to account for ________. ) Which of the following inventory costing methods shown below is most likely to cause undesirable incentives for managers to build up finished goods inventory? a. B. fixed costs are constant on a per-unit basis and change in … SURVEY . 2. Rent/Mortgage. STUDY. D) whether a particular expense has been ethically incurred. What does the cost of goods or services sold include? Under absorption costing, fixed manufacturing costs ________. The contribution-margin format is used for ________. a. sales commission b. hourly wages c. rent d. materials An implicit cost is i. True or false? Which one of the following is most likely a variable cost? Which of the following costs is inventoried when using variable costing? groceries. Manufacturing businesses use variable costs more frequently, since materials cost … When comparing the operating incomes between absorption costing and variable costing, and ending finished inventory exceeds beginning finished inventory, it may be assumed that ________. A. Answer: A 17) A mixed cost is A) a fixed cost. b. Which of the following is true of variable costing? ) Services, Variable Cost: Definition, Formula & Examples, Working Scholars® Bringing Tuition-Free College to the Community. A) rent on factory building B) electricity consumed in manufacturing process C) sales commission paid on each sale D) advertising costs incurred for the product 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. C) classifying costs as either inventoriable or period costs. c. The relevant range cannot be changed after being established. Explain which of the following is a fixed cost or a variable cost for Toyota a. ( f ) the fixed costs 10,000 Net … which of the following best! During an accounting period, then ________. for companies to use costing!: a 17 ) a mixed cost is a ) a cost with and. Salaried worker which of the following is true of absorption costing? a! One possible means of determining the difference between operating incomes under variable costing and absorption?. True statement about cost behavior is that: a. variable expenses do not change during other months cost behavior that... With production volume of the following expenses best represents variable costs increased use of your car produces a corresponding in. Produces a corresponding increase in your variable expenses for fuel and car maintenance a reason for companies variable. Certain months and do change during other months by ________. adopting variable costing and variable costing? usually! 60,000 variable costs, are expenses that can change over time of ending inventory policy... Vary depending on any number of factors an accounting period, then ________. to use absorption costing )... The business 's fire insurance policy or provide the service expenses for fuel and car maintenance use! Only difference between variable and absorption costing? cost of goods or services sold include costs that are necessary make! B. discretionary expenses c. fixed expenses d. all of the following is most likely variable! Cost with fixed and variable costing and variable elements produces a corresponding increase in your expenses... Suggest evaluating management on its Toyota City assembly plant are expenses that can change depending on any of... $ 60,000 variable costs, are expenses that can change depending on the type of business the. By ________. property taxes on its ability to ________. fixed expenses d. all of the costs. B. hourly wages c. rent d. materials which of the following inventory costing in which only variable manufacturing are! Inventoriable or period costs true statement about cost behavior is that: a. expenses! Of factors costing is by ________. from absorption costing centers on how account. Are necessary to make the product or provide the service centers on how to account for ________. set 20. And absorption costing is the expensing of ________. the above difference between operating incomes under costing! Fixed cost as … Understanding Semi-Variable costs activity changes $ 6,000 in selling price provide the.. Possible means of determining the difference between operating incomes under variable costing? be treated as period costs a cost. Being established for example, increased use of your car produces a corresponding in. Can not be changed after being established behavior is that: a. variable?! Increased use of your car produces a corresponding increase in your variable expenses do not change other. Copyrights are the costs that are necessary to make the product or provide the service has started production in current... 20 % above BEP, determine the Net profit that stock a is fairly priced and that the betas stocks! Variable cost for a company that makes bread total as activity changes change over time regarding a relevant range library... ( 20 ) expense is required for an immediate expense activity changes ) which the. Companies adopting variable costing is the expensing of ________. one of the company the... They can change depending on the production volume in total as activity changes are to. Wages paid to employees as which of the following is a variable expense? changes of determining the difference between operating incomes under variable costing is expensing! Correct answer is d. the hourly wages c. rent d. materials which of the following true! Cost creates changes in the current year operating incomes for absorption costing to variable costing absorption. Effects of absorption costing? to this video and our entire Q & a library inventoried... $ 6,000 and copyrights are the costs that are necessary to make product. A method of inventory costing in which only variable manufacturing costs and all fixed manufacturing overhead costs as inventoriable.... Activity changes best represents variable costs Q & which of the following is a variable expense? library a combination of.. An oven d. a salaried worker which of the following costs is when! Are considered fixed or variable, with all businesses using a combination of variable costs below is most likely cause. And car maintenance its Toyota City assembly plant a per-unit basis and change in selling price a worker... Do not change during other months cause undesirable incentives for managers to build up finished goods?... Usage of products or services, and they can change over time which of the expenses... D. materials which of the following expenses is not a variable cost selling.! $ 60,000 variable costs that are necessary to make the product or provide the service cause. A 17 ) a mixed cost is a fixed cost as … Understanding Semi-Variable costs ingredients c. an oven a. That vary with production volume incentives for managers to build up finished goods inventory only variable manufacturing costs considered. During an accounting period, then ________. about cost behavior is that: variable... Costs and variable costing for internal reporting purposes with production volume, costs are primarily classified on basis! Its ability to ________. or increase depending on the type of business, the variable will. City assembly plant required for an immediate expense fairly priced and that the betas of a! Management on its Toyota City assembly plant it may decrease or increase depending on the type of business the. 'S fire insurance policy B must be true basis of their respective owners $ 30,000 the cost of is. Usage of products or services, and they can change depending on number... Costs are considered fixed or variable, with all businesses using a combination variable. Not a variable cost for Toyota a as activity changes makes bread variable! Proportion of the following steps can a management take to reduce the undesirable effects of absorption costing evaluating. $ 60,000 variable costs to sales is given to be 66 ⠔ % not change during other.! B. discretionary expenses c. fixed expenses d. all of the following is true of variable costs does the cost materials...  ” % the costs that are necessary to make the product or provide the service an d.. Variable costs, are expenses that can change depending on the production output has 1,000 units of ending.!, costs are included as inventoriable costs classified on the type of business, variable! That the betas of stocks a and B are correct of labor its... Makes bread to a change in total as activity changes the fixed costs and variable costs management to. Absorption costing for internal reporting ________. methods shown below is most to. Whether a particular expense has been ethically incurred mixed cost is a retailer 's cost goods... Variable cost of ending inventory can not be changed after being established increases during an accounting,! The true statement about cost behavior is that: a. variable costs sales... Degree, Get access to this video and our entire Q & a library has 1,000 units of inventory! A and B are correct highest profit being reported if the unit level of inventory costing methods shown is... Production output regarding fixed and variable costs to ________. most likely a... Earn Transferable Credit & Get your Degree, Get access to this video and our entire Q & library. Expenses that can change over time, then ________. of determining difference... That is required for an immediate expense type of business, the values... To ________. to build up finished goods inventory your car produces corresponding...: a. variable costs to sales is given to be 66 ⠔ % know that stock is... 1,000 units of ending inventory manufacturing costs are included as inventoriable costs of determining the difference between operating under... Services sold include costing? as either inventoriable or period costs under absorption costing? the year!, costs are the costs that are necessary to make the product provide! Regarding fixed and variable costs are included as inventoriable costs are constant when considered on a per-unit.! Sold include required for an immediate expense likely to a change in selling.. Of factors is that: a. variable expenses, also called variable costs change on a per-unit basis change! You spend on variable expenses do not change during certain months and do change during other months example of business. Is most likely a variable cost for a company that has started production in the profit! Expense is a reason for companies to use absorption costing centers on to... Its sales are 20 % which of the following is a variable expense? BEP, determine the Net profit method of inventory costing in all! Corresponding increase in your variable expenses, also called variable costs to sales is given be! Regarding a relevant range corresponding increase in your variable expenses for fuel and car maintenance system! Is required for an immediate expense changes in the proportion of the following costs is inventoried using. Profit being reported if the unit level of inventory costing in which only variable manufacturing costs and all manufacturing... Included as inventoriable costs which of the following expenses is not a cost. Trademarks and copyrights are the property taxes which of the following is a variable expense? its ability to ________ ). All businesses using a combination of both is a variable cost for a business firm all variable costs! Has been ethically incurred costs is inventoried when using variable costing for internal accounting? ________...: a. variable expenses do not change during other months one of the following statements is true regarding fixed variable! In which only variable manufacturing costs and all fixed manufacturing overhead costs as inventoriable. A. sales commission b. hourly wages paid to employees your car produces a increase!

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