31. Given the following data, total product cost per unit under absorption costing will be $400 greater than total product cost per unit under variable costing.
Direct labor
|
$1.50 per unit
|
Direct materials
|
$1.50 per unit
|
Overhead
|
|
Total variable overhead
|
$900,000
|
Total fixed overhead
|
$1,200,000
|
|
|
Expected units to be produced
|
3,000 units
|
32. The variable costing income statement classifies costs based on cost behavior rather than function.
33. Contribution margin is another way to refer to gross margin.
34. Under a traditional income statement format expenses are grouped according to cost behavior.
35. A variable costing income statement focuses attention on the relationship between costs and sales that is not evident from the absorption costing format.
36. When units produced equal units sold, reported income is identical under absorption costing and variable costing.
37. Sales less variable costs equals manufacturing margin.
38. When units produced exceed the units sold, income under absorption costing is higher than income under variable costing.
39. When units produced are less than units sold, income under absorption costing is higher than income under variable costing.
40. Income under absorption costing will always be different than income under variable costing.