1)Cost classifications used for decision making include:

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Multiple Choice

• Direct cost and indirect cost.
• Variable cost and fixed cost.
• Product cost and period cost.
• Relevant and irrelevant cost.

2)Assume the following information for a merchandising company:

Sales	$ 500,000
Variable selling expenses	$ 25,000
Net operating income	$ 30,000
Fixed administrative expenses	$ 50,000
Fixed selling expenses	$ 40,000
Variable administrative expenses	$ 5,000

What is the gross margin?

Multiple Choice

• $120,000
• $350,000
• $150,000
• $300,000