which of the following is a variable expense?

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

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