Fragakis Enterprises uses a job-order costing system. In reviewing its records at the end of the year, the company has discovered that $2,000 of raw materials has been drawn from the storeroom and used in the production of Job 1010, but that no entry has been made in the accounting records for the use of these materials. Job 1010 has been completed but it is unsold at year end. This error will cause:

a) Finished Goods to be understated by $2,000 at the end of the year.

b) Work in Process to be understated by $2,000 at year end.

c) Cost of Goods Manufactured to be overstated by $2,000 for the year.

d) Cost of Goods Sold to be overstated by $2,000 for the year.

Which of the following metrics is the best one for a companys management to consider to determine the effect of dropping a specific product line on the net operating income of the company as a whole?

a) the product lines sales dollars

b) the Product lines segment margin

c) the product lines segment margin minus an allocated portion of common fixed expenses

d) the product lines contribution margin