14) Which of the following statements is true? A) Over the short nun all costs have cost drivers. b) Volume of production is a cost driver of distribution costs. There is a cause-and-effect relationship between the cost driver and the amount of cost. D) Fixed costs have cost drivers over the short run. Explanation: A) 15) Wonderful Products Manufacturing Corp. provided the following information for last month Sales Variable costs Fixed costs Operating income $43,000 14,000 11,000 $18,000 If sales reduce to half of the amount in the next month, what is the projected operating income? D) $3,500 A) $2,000 B) $18,000 C) $9,000 Explanation: A) D) Projected operating income (543,000/2) - ($14,000/2) - $11,000 - $3,500 16) The following information pertains to Alleigh's Mannequins Manufacturing costs Units manufactured Units sold Beginning inventory $2,170,000 31,000 28,500 units sold for $90 per unit 0 units D) $2,170,000 What is the amount of gross margin? A) $2,565,000 B) $570,000 C) $1,995,000 Explanation: A) B) 28,500 * ($90 - ($2,170,000/31,000)) - $570,000 C) 1 Swansea Manufacturing currently pred apply for sales to regular customers month. The following per unit data for 3000 Lires $38 Direct materials Direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing costs 14 19 20 591 The plant has capacity for 5,000 tires and is considerine expanding production to 4,000 tires. What is the total cost of producing 4,000 tires? A) $344,000 B) $288,000 C) $364,000 D) $209,000 Explanation: A) Total cost of producing 4,000 tires ($38+ $14 +$19) * 4,000 units) + ($20 x 3,000 units) = $344,000 B) D) 18) All Rite Manufacturing reported the following: Revenue Beginning inventory of direct materials, January 1, 2015 Purchases of direct materials Ending inventory of direct materials, December 31, 2015 Direct manufacturing labor Indirect manufacturing costs Beginning inventory of finished goods, January 1, 2015 Cost of goods manufactured Ending inventory of finished goods, December 31, 2015 Operating costs $450,000 30,000 153,000 18,000 26,000 42,000 47,000 233,000 41,000 157,000 C) $217,000 D) $60,000 What is All Rite's gross margin (or gross profit)? A) $54,000 B) $211,000 Explanation: A) B) S450,000 - (547,000 + $233,000 - $41,000) = $211,000 D)