Acme Co. produces a single product. Information about the product for the past year is as follows:

Production (in units)25,000

Sales (units)23,000

Selling price/unit$52.00

Beg. Inventory (units)-0-

Variable costs per unit:

Direct materials$16.00

Direct labor$6.00

Variable overhead$3.60

Variable selling exps.$8.00

Fixed overhead$ 215,000

Fixed selling and admin.$53,600

1.Refer to the data in question 8. If Acme Co. uses variable costing, its operating income would be:

a.$171,800

c. $167,800

b. $158,600

d. $154,600

2. Refer to the data in question 8. Using absorption costing, the operating income would be:

a. $171,800c. $167,800

b. $158,600d. $154,600

3. If variable costs per unit decrease, sales volume at the break-even point will

a. Increase

c. Remain the same

b. Decrease

d. Remain the same; however, contribution margin per unit will decrease