INCLUDE SOLUTION

1. NICOLAS Corporationreported the following actual cost data for the month of June:

Inventories:	Beginning	Ending
RM	30,000	26,000
WIP	18,000	19,000
FG	42,000	37,000
Additional information:
Sales	250,000
RM purchases	66,000
Direct labor cost	32,000
MOH	74,000
Selling expense	20,000
Administrative expense	45,000

1.a) The operating expenses for June was ____________

a. 65,000

b. 20,000

c. 70,000

d. 45,000

1.b) The raw materials used in June was ____________ .

a. 70,000

b. 26,000

c. 62,000

d. 66,000

1.c) The total manufacturing cost for June was ____________

a. 106,000

b. 172,000

c. 176,000

d. 74,000

1.d.) The cost of goods sold for June was _______________ .

a. 170,000

b. 126,000

c. 180,000

d. 255,000

1.e.) The net operating income for June was ____________ .

a. 5,000

b. 79,000

c. 70,000

d. 13,000

2. AUSTINE Corporationhas provided its contribution format income statement for August:

Sales		153,300
Less: VC		94,900
CM		58,400

Less: FC		50,300
Net operating income		8,100

2.a) The degree of operating leverage is closest to ________ .

a. 0.14

b. 18.93

c. 7.21

d. 0.05

2.b) If the company's sale increases by 10%, its net operating income should increase by about _______ .

a. 5%

b. 72%

c. 189%

d. 10%