1) Variable costs as a percentage of sales for Lemon Inc. are 61%, current sales are $580,000. and fixed costs are $195,000. How much will operating income change if sales increase by $44,300?

a.$17,277 decrease

b.$17,277 increase

c.$27,023 decrease

d.$27,023 increase

2) A company used $35,000 of direct materials, incurred $73,000 in direct labor cost, and had $114,000 in factory overhead costs during the period. If beginning and ending work in process inventories were $28,000 and $32,000, respectively, the cost of goods manufactured was

a.$226,000

b.$218,000

c.$190,000

d.$222,000