1.Which of the following is not part of the production activity in the flow of manufacturing activities?

A.

Beginning work in process inventory.

B.

Cost of goods manufactured.

C.

Direct labor.

D.

Factory overhead.

E.

Total finished goods available for sale.

2.

Last year, Gordon Company sold 20,000 units of its only product. If sales increase by 20% in the current year, how will unit variable cost and total fixed cost be affected?

Unit Variable Cost Total Fixed Cost

A) Remains constant Remains constant

B) Increases Decreases

C) Decreases Remains constant

D) Remains constant Decreases

E) Remains constant Increases

A.

Choice A.

B.

Choice B.

C.

Choice C.

D.

Choice D.

E.

Choice E.