1) The variable costing income statement classifies costs based on cost behavior rather than function.
True or False?
2) The data needed for cost-volume-profit analysis is readily available if the income statement is prepared using a contribution format.
True or false?
3) When standard manufacturing costs are recorded in the accounts and the cost variances are immaterial at the end of the accounting period, the cost variances should be:
A) Closed to cost of goods sold.
B) Ignored.
C) Carried forward to the next accounting period.
D) Written off as a selling expense.
E) Allocated between cost of goods sold, finished goods, and goods in process.
4) The accounting rate of return is calculated as:
A) The cash flows divided by the total investment
B) The average investment divided by the after-tax income.
C) The after-tax income divided by the total investment.
D) The cash flows divided by the average investment.
E) The after-tax income divided by the average investment.