Pls, answer the multiple choice in the "Questions''. Others files just help to solve it.

Absorption Costing Direct Materials Direct Labor Variable Overhead Fixed Overhead Total $ Sales Price per unit Units Sold Variable S&A Fixed S&A Fixed Overhead Sales COGS Gross Profit Fixed S&A Variable S&A Net Income Sales Variable Costs Variable Manufacturing Variable S&A Contribution Margin Fixed S&A Fixed Overhead Net Income - Variable Costing Produced Sold Ending Inventory $ FOH per unit Difference - Absorption Costing: Year 2010 U.S. GAAP $ - $ $ $ - $ $ - Variable Costing Decision Making $ - $ - $ $ $ - $ $ - $ $ - Discount Rate Initial Investment Annual Cash Flows Payback Period 1 2 3 4 5 6 7 8 9 10 Net Present Value (NPV) Internal Rate of Return (IRR) Payback Period 0.00 $ Err:523 0.00 December January February Unit Sales Selling Price Cost per unit Sales $ - $ - COGS Gross Profit Expenses Sales Commissions Advertising Rent Administrative Depreciation $ $ - $ $ - $ - $ - $ $ - $ $ - Other Total Expenses Net Income March $ - $ $ - $ - $ $ ` Variable Costing and Absorption Costing - Questions 1 - 8. Production Costs Direct materials cost Direct labor cost Variable overhead cost Fixed overhead cost Nonproduction Costs Variable S&A expenses $2 per unit Fixed S&A expenses $200,000 per year $4 per unit $8 per unit $3 per unit $600,000 per year Sales price/unit $40 2009 2010 2011 Units Produced 60,000 60,000 60,000 Units Sold 60,000 45,000 75,000 Units in Ending Inventory 0 15,000 0 UNITS PRODUCED EXCEED UNITS SOLD ICEAGE COMPANY Income Statement (Absorption Costing) For Year Ended December 31, 2010 Sales Cost of goods sold Gross margin S&A expenses Net income ICEAGE COMPANY Income Statement (Variable Costing) For Year Ended December 31, 2010 Sales Variable expenses Variable production costs Variable S&A expenses Contribution margin Fixed expenses Fixed overhead Fixed S&A expenses Net income Variable Costing and Absorption Costing UNITS PRODUCED ARE LESS THAN UNITS SOLD ICEAGE COMPANY Income Statement (Absorption Costing) 1 For Year Ended December 31, 2011 Sales Cost of goods sold Gross margin S&A expenses Net income ICEAGE COMPANY Income Statement (Variable Costing) For Year Ended December 31, 2011 Sales Variable expenses Variable production costs Variable S&A expenses Contribution margin Fixed expenses Fixed overhead Fixed S&A expenses Net income 1. What is gross margin if 45,000 units are sold? A. $650,000 B. $675,000 C. $700,000 D. $725,000 2. What is net income under absorption costing if 45,000 units are sold? A. $375,000 B. $380,000 C. $385,000 D. $390,000 3. What is contribution margin if 45,000 units are sold? A. $1,035,000 B. $1,040,000 C. $1,045,000 D. $1,050,000 4. What is net income under variable costing if 45,000 units are sold? A. $190,000 2 B. $205,000 C. $220,000 D. $235,000 5. What is gross margin if 75,000 units are sold? A. $1,123,000 B. $1,125,000 C. $1,230,000 D. $1,345,000 6. What is net income under absorption costing if 75,000 units are sold? A. $775,000 B. $785,000 C. $790,000 D. $800,000 7. What is contribution margin if 75,000 units are sold? A. $1,725,000 B. $1,850,000 C. $1,930,000 D. $1,963,000 8. What is net income under variable costing if 75,000 units are sold? A. $873,000 B. $905,000 C. $925,000 D. $935,000 Preparation and analysis of budgeted income statements - Questions 9 - 14. Lilliput, a one-product mail-order firm, buys its product for $60 per unit and sells it for $130 per unit. The sales staff receives a 10% commission on the sale of each unit. Its December income statement follows: LILLIPUT COMPANY Income Statement For Month Ended December 31, 2011 Sales Cost of goods sold Gross profit Expenses Sales commissions (10%) Advertising Store Rent $1,300,000 600,000 700,000 130,000 200,000 24,000 3 Administrative salaries Depreciation Other expenses Total expenses Net income 40,000 50,000 12,000 456,000 $244,000 Management expects December's results to be repeated in January, February, and March of 2012 without any changes in strategy. Management, however, has an alternative plan. It believes that unit sales will increase at a rate of 20% each month for the next three months (beginning with January) if the item's selling price is reduced to $115 per unit and advertising expenses are increased by 25% and remain at that level for all three months. The cost of its product will remain at $60 per unit, the sales staff will continue to earn a 10% commission, and the remaining expenses will stay the same. Required Prepare budgeted income statements for each of the months of January, February, and March that show the expected results from implementing the proposed changes. Use a three-column format, with one column for each month. LILLIPUT COMPANY Budgeted Income Statement For Months of January, February, and March January February March Sales* Cost of goods sold* Gross profit Expenses Sales commissions (10%) Advertising ($200,000 x 1.25) Store rent Administrative salaries Depreciation Other expenses Total expenses Net income *Volume for the next three months increases by 20% per month. Sales Units (@ $115) December ($1,300,000/$130) January February March Cost of Goods Sold (@ $60) 4 9. What is the expected gross profit in January? A. $660,000 B. $670,000 C. $715,000 D. $725,000 10. What is the expected net income in January? A. $126,000 B. $132,000 C. $146,000 D. $155,000 11. What is the expected gross profit in February? A. $665,000 B. $684,000 C. $792,000 D. $815,000 12. What is the expected net income in February? A. $242,300 B. $250,400 C. $265,800 D. $271,300 13. What is the expected gross profit in March? A. $927,900 B. $933,500 C. $942,600 D. $950,400 14. What is the expected net income in March? A. $375,680 B. $382,460 C. $387,670 D. $397,350 5 Computing Net Present Value, Internal Rate of Return, and Payback Period - Questions 15 - 20. FasTrac is considering investing in a Project A and Project B which will require an initial investment of $16,000. Assume FasTrac requires a 11% annual return. The expected annual cash inflows are as follows: 1 2 3 4 5 6 7 8 Project A $3,000 $4,000 $4,000 $4,000 $5,000 $3,000 $2,000 $2,000 Project B 1 2 3 4 5 6 7 8 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 15. What is the NPV for Project A? A. $1,735.85 B. $1,911.23 C. $2,235.67 D. $2,366.95 16. What is the IRR for Project A? A. 12.25% B. 14.47% C. 16.25% D. 18.30% 17. What is the payback period for Project A? 6 A. B. C. D. 3.5 years 3.75 years 4.0 years 4.2 years 18. What is the NPV for Project B? A. $4,154.35 B. $4,425.93 C. $4,584.49 D. $4,750.35 19. What is the IRR for Project B? A. 18.62% B. 16.58% C. 14.35% D. 12.10% 20. What is the payback period for Project B? A. 3.5 years B. 4.0 years C. 4.25 years D. 4.60 years 21. Bonus Question!! You have taken out a $25,000 loan to purchase a car. Your interest rate is 6% and your loan term is 4 years. How much is your monthly car payment? A. $524.56 B. $587.13 C. $595.39 D. $602.85 7