Green Company makes calculators. During the most recent accounting period, Green paid $3,000 for raw materials, $5,000 for labor, and $2,000 for overhead costs that were incurred to make calculators. Green started and completed 10,000 calculators, of which 5,000 were sold. Based on this information, how much expense would Green recognize on the income statement?

(A) Which of the following transactions would cause net income for the period to be understated and explain why your answer is correct feel free to make-up numbers to help your explanation?

a. Misclassifying period cost and considering it product cost

b. Misclassifying product cost and considering it period cost

c. All of the above

d. None of the above

EXPLAINATION:____________________________________________________________________________________________________________________________________________

(B) What is an upstream and downstream cost? Give an example of each that a bakery would have:

(Upstream):____________________________________________________________________

______________________________________________________________________________

(Downstream)_________________________________________________________________________________________________________________________________________________________

(A)

Number of Units:	2,000	4,000
Total Cost:
Variable	$8,000	$16,000
Fixed	$8,000	$8,000
Cost per unit:
Variable	$4.00	(a)
Fixed	$4.00	(b)

Looking at the table above, what is (a):________________ and (b):______________________

(B)

	UNITS SOLD
	100	200	300	400
Cost #1	$12 per unit	$6 per unit	$4 per unit	$3 per unit
Cost #2	$5 per unit	$5 per unit	$5 per unit	$5 per unit

Determine whether Cost #1 and Cost #2 is variable, fixed, or mixed and why

Cost #1:______________. Why: __________________________________________________

Cost #2:______________. Why: _________________________________________________