7. Mardi Gras Manufacturing produces blinking hats for their annual festivities. They are a privately held company and use a Variable Costing Income Statement. In 2018, the Variable Costing Operating Income for Mardi Gras Manufacturing was $20,000. They had fixed manufacturing overhead of $2000. The variable manufacturing costs were: variable overhead $1300, Direct Material $2500 and Direct Labor $1500. Other data shows they produced 500 hats in 2018, and sold 350. Mardi Gras Manufacturing is now going public and needs to produce an Absorption Costing Income Statement. What is the FMOH p/unit? a. $4.00 b. $ 5.71 c. $4.29 d. $5.00

8. Mardi Gras Manufacturing produces blinking hats for their annual festivities. They are a privately held company and use a Variable Costing Income Statement. In 2018, the Variable Costing Operating Income for Mardi Gras Manufacturing was $20,000. They had fixed manufacturing overhead of $2000. The variable manufacturing costs were: variable overhead $1300, Direct Material $2500 and Direct Labor $1500. Other data shows they produced 500 hats in 2018, and sold 350. Mardi Gras Manufacturing is now going public and needs to produce an Absorption Costing Income Statement. What is the difference in NOI between Variable Costing and Absorption Costing? a. $856.50 b. $600.00 c. $1400.00 d. $3000.00

9. Mardi Gras Manufacturing produces blinking hats for their annual festivities. They are a privately held company and use a Variable Costing Income Statement. In 2018, the Variable Costing Operating Income for Mardi Gras Manufacturing was $20,000. They had fixed manufacturing overhead of $2000. The variable manufacturing costs were: variable overhead $1300, Direct Material $2500 and Direct Labor $1500. Other data shows they produced 500 hats in 2018, and sold 350. Mardi Gras Manufacturing is now going public and needs to produce an Absorption Costing Income Statement. What is the Absorption Costing Operating Income for 2018? a. $20,000 b. $22,000 c. $18,000 d. $20,600