1. Belle Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year.

Units produced this year	60,000	units
Units sold this year	36,000	units
Direct materials	$ 20	per unit
Direct labor	$ 22	per unit
Variable overhead	$ 3	per unit
Fixed overhead	$ 390,000	in total

Given Belle Company's data, compute cost per unit of finished goods under variable costing.

Multiple Choice

$42.00

$47.00

$43.88

$45.00

$51.50

2. Belle Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year.

Units produced this year	25,000	units
Units sold this year	15,000	units
Direct materials	$ 9	per unit
Direct labor	$ 11	per unit
Variable overhead	$ 3	per unit
Fixed overhead	$ 137,500	in total

Belle Company's product is sold for $50 per unit. Variable selling and administrative expense is $2 per unit and fixed selling and administrative is $170,000 per year. Compute the net income under absorption costing.

Multiple Choice

$55,000

$67,500

$80,500

$122,500

$205,000