In a year in which total finished goods inventory balance grows from the beginning to the end of the year: Select one: O a. Inventory balance has no impact on reported income - it is a balance sheet item not an income statement item. O b. Variable costing should be used for external financial reporting because the absorption costing method shows a distortion in operating income. O c. Net income reported using absorption costing is lower than variable costing because more of the fixed production costs are held on the balance sheet - hence lower cost of goods sold. O d. Net income reported using absorption costing is higher than variable costing because more of the fixed production costs are held on the balance sheet - hence lower cost of goods sold. What is normal costing all about? Select one: O a. Only include costs of normal operations. Other items are considered extraordinary and should not be included in the analysis for normal costing. O b. None of these O c. It only takes into consideration normal volume of operations. O d. We have to set up cost systems for normal operations of a business so that exceptions can be hilited in exception reporting. GAAP and managerial accounting? Select one: O a. Some would suggest that GAAP rules are the foundations of all managerial accounting analysis - and therefore the two are inextricably linked. O b. GAAP is the underlying foundation of managerial accounting. Ever since Sir Francis Gaap developed double entry accounting we stand by the principles of ethics and good reporting. O c. all of these. O d. GAAP is about rules. We don't need rules! We need information to help managers make good decisions. Which of the following would be included in cost of goods manufactured for a cabinet company? Select one: O a. Wages paid to shop maintenance workers. O b. Audit fees paid at the end of the year totalling $32,000 in accordance with GAAP. O c. All of these should be included. O d. Sales commissions paid out at 3% of selling price of cabinets. Breakeven Select one: O a. Contribution Margin equals fixed costs. O b. Breakeven analysis is used mainly for non-profit businesses which do not pursue profits. They just want to cover their costs - hence breakeven analysis is performed on their business activities. O c. Total Revenue equals total contribution margin. O d. Total Revenue equals fixed costs