1. The level of inventory of a manufactured product increases by 4,000 units during a period. The following data are also available:

	Variable	Fixed
Unit manufacturing costs during the period	$22.00	$11.00
Unit operating expenses during the period	7.00	5.00

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

	a.	$64,000 decrease
	b.	$44,000 decrease
	c.	$64,000 increase
	d.	$44,000 increase

2. Ednas Chocolates had planned to sell chocolate-covered strawberries for $3.00 each. Due to various factors, the actual price was $2.75. Ednas was able to sell 1,000 more strawberries than the anticipated 4,000. What is (1) the quantity factor and (2) the price factor for sales?

	a.	(1) $(4,000) (2) $(3,000)
	b.	(1) $3,000, (2) $(1,250)
	c.	(1) $1,250, (2) $3,000
	d.	(1) $3,000, (2) $(3,000)