What would be effect on income from operations if, Ask an Expert

Accounting

1. Under variable costing, which of the given costs would be comprised in finished goods inventory?

a. Advertising costs

b. Wages of carpenters in a furniture factory

c. Straight-line depreciation on factory equipment

d. Salary of vice-president of finance

2. Level of inventory of a manufactured product has increased by 8,000 units during a period. Following data are also available:

	Variable	Fixed
Unit manufacturing costs of the period	$12.00	$5.00
Unit operating expenses of the period	4	1.5

What would be effect on income from operations if absorption costing is used rather than variable costing?

a. $44,000 increase

b. $40,000 decrease

c. $52,000 increase

d. $40,000 increase

3. Production and sales estimates for April are given:

Estimated inventory (units), April	19,000
Desired inventory (units), April 30	18,000
Expected sales volume (units):
Area A	3,500
Area B	4,750
Area C	4,250
Unit sales price	$20

Number of units expected to be manufactured in April is:

a.12,500

b.13,500

c.10,000

d.11,500

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M917128

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