a. 23. Explain the difference between absorption and variable costing. _costing is also called full costing because the full product costs, including fixed overhead costs, are included in the product cost and cost of goods sold. b. costing separates the variable and fixed costs using a contribution margin income statement approach. costing is used to produce GAAP financial statements. d. costing treats fixed manufacturing overhead as a period cost that is expensed as incurred, while costing treats fixed manufacturing overhead as a product cost that is expensed as cost of goods sold when the product is sold. I C. 24. Describe the effects of inventory increases and decreases on net income under absorption and variable costing a. If a company produces more than they sell inventory (increases or decreases?) vorce b. When there is an inventory buildup, which costing method will result in the highest net income? Why? Sen 25. Describe and Identify Cost Drivers a. Cost drivers have a direct relationship with overhead costs; if the usage of a cost driver increases, overhead costs will increase or decrease?) b. Will identifying more or fewer production activities and their cost drivers make overhead estimations more accurate? 26. Calculate Activity-Based Product Costs I a. Activity-based costing applies to products based on the various activities that drive costs. b. In ABC, overhead costs are assigned to for each activity that has b identified in the manufacturing process. c. What are the steps in the Activity-Based Costing process? s been I. iii. C. What are the 5 steps in the Activity-Based Costing process? i. ii. iii. iv. V