Question
Benjamin Company had the following results of operations for the past year: Sales (16,000 units at $10.35) $165,600 Direct materials and direct labor $101,600 Overhead
Benjamin Company had the following results of operations for the past year:
Sales (16,000 units at $10.35) $165,600
Direct materials and direct labor $101,600
Overhead (20% variable) 21,600
Selling and administrative expenses (all fixed) 32,700 (155,900)
Operating income $9,700
A foreign company (whose sales will not affect Benjamin's market) offers to buy 4,700 units at $8.27 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $670 and selling and administrative costs by $370. If Benjamin accepts the offer, its profits will: A. Increase by $9,024 B. Increase by $38,869 C. Increase by $7,755 D. Increase by $6,715 E. Decrease by $9,024
2.Brush Industries reports the following information for May:
Sales $960,000
Fixed cost of goods sold 112,000
Variable cost of goods sold 262,000
Fixed selling and administrative costs 112,000
Variable selling and administrative costs 137,000
Calculate the operating income for May under absorption costing? A. $698,000 B. $337,000 C. $561,000 D. $586,000
Georgia, Inc. has collected the following data on one of its products. The direct materials price variance is
Direct materials standard (3 lbs @ $2/lb) $ 6 per finished unit
Total direct materials cost varianceunfavorable $ 23,750
Actual direct materials used 120,000 lbs
Actual finished units produced 30,000 units
A. $23,750 unfavorable B. $55,750 favorable. C. $36,250 favorable D. $36,250 unfavorable E. $60,000 unfavorable
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