1. During the year, MSU purchased materials costing $40,000 and incurred direct labor cost of $15,000. Manufacturing overhead totaled $25,000 for the year. Information on inventories was as follows:

Jan 1st Dec 31^st

Materials $5,000 $6,000

Work in process 1,000 2,000

Finished goods 6,000 4,000

What was the cost of goods sold for the year?

a. $78,000

b. $69,600

c. $79,000

d. $80,000

2. MSU Company reported the following financial information:

Direct labor $145,000

Manufacturing overhead $300,000

Direct materials $270,000

Inventories

Jan. 1 Dec. 31

Direct materials $20,000 $50,000

Work in process 60,500 80,000

Finished goods 45,000 70,000

Conversion costs would total:

1. $715,000
2. $445,000
3. $415,000
4. $570,000

3. With respect to Sample, LLC's total variable costs, which of the following statements is true?

a. They will remain the same as production levels change within the relevant range.

b. They will decrease as production decreases within the relevant range.

c. They will decrease as production increases within the relevant range.

d. They will increase as production decreases within the relevant range.