1.During the most recent year, Evans Company had an operating income of $90,000 using absorption costing and $84,000 using variable costing. The fixed manufacturing overhead application rate was $6 per unit. There were no beginning inventories. If 16,000 units were produced last year, what were the sales in units for last year?

a.15,000 units.

b.23,000 units.

c.21,000 units.

d.28,000 units.

2.What is a continuous (or perpetual) budget?

a.It is a strategic plan that does not change.

b.It is prepared for a range of activities so that the budget can be adjusted for changes in activity.

c.It is used in companies that experience no change in sales.

d.It is a plan that is updated monthly or quarterly, dropping one period and adding another.