PLEASE ONLY ATTEMPT IF YOU ARE GOING TO DO ALL QUESTIONS; IF NOT WILLING TO DO ALL QUESTIONS THEN DO NOT ATTEMPT THIS AS THERE ARE OTHER PEOPLE THAT WILL. THIS IS MY LAST QUESTION I CAN NOT AFFORD TO ASK ANOTHER ONE SO PLEASE DO ALL QUESTIONS! THANK YOU

• What is the difference between absorption costing and variable costing?

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• Are selling and administrative expenses treated as product costs or as period costs under variable costing?

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• Explain how fixed manufacturing overhead costs are shifted from one period to another under absorption costing.

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• What are the arguments in favor of treating fixed manufacturing overhead costs as product costs?

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• What are the arguments in favor of treating fixed manufacturing overhead costs as period costs?

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• If the units produced equals the units sold, which method would you expect to show the higher net operating income, variable costing or absorption costing? Why?

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• If the units produced exceed the units sold, which method would you expect to show the higher net operating income, variable costing or absorption costing? Why?

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• If fixed manufacturing overhead costs are released from inventory under absorption costing, what does this tell you about the level of production in relation to the level of unit sales?

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• Under absorption costing, how is it possible to increase net operating income without increasing sales?

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• How does Lean Production reduce or eliminate the difference in reported net operating income between absorption and variable costing?

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• What is a segment of an organization? Give several examples of segments.

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• What costs are assigned to a segment under the contribution approach?

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• Distinguish between a traceable fixed cost and a common fixed cost. Give several examples of each.

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• Explain how the contribution margin differs from the segment margin.

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• Why arent common fixed costs allocated to segments under the contribution approach?

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• How is it possible for a fixed cost that is traceable to a segment to become a common fixed cost if the segment is divided into further segments?

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• Should a company allocate its common fixed costs to business segments when computing the break-even point for those segments? Why?