QUESTION 4 20 points Save Answer Choose \"TRUE\" or \"FALSE\" as applicable for

Question

QUESTION 4 20 points Save Answer Choose "TRUE" or "FALSE" as applicable for each of the following items as they pertain to building inventory levels. Under absorption costing, beginning inventory cost:s include fixed manufacturing costs from prior periods . True B. False Under absorption costing, building ending inventories in a given period will not change the amount of fixed manufacturing costs charged to the current period income statement. : When beginning inventory is sold under absorption costing, cost of goods sold for the current period will include all current period fixed manufacturing costs plus some prior period fixed manufacturing costs Under variable costing, building ending inventories in a given period will not change the amount of variable manufacturing costs charged to the current

Explanation / Answer

1. True (beginning inventory is valued in prior period at total manufacturing cost including fixed manufacturing overheads)

2. False (Ending inventory includes the fixed manufacturing OH in its valuation. Hence the current fixed manufacturing OH will get deducted with it)

3. True (Total fixed manufacturing cost include the current year fixed manufacturing OH and Fixed OH released which have been included in beginning inventory)

4. False (Variable manufacturing cost incurred in current year will be charged after after deducting the ending inventory valuation which is valued at variable manufacturing cost)

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