Q22:

A business operated at 100% of capacity during its first month and incurred the following costs:

Production costs (18,600 units):
Direct materials	$177,600
Direct labor	231,500
Variable factory overhead	249,700
Fixed factory overhead	92,100	$750,900
Operating expenses:
Variable operating expenses	$122,800
Fixed operating expenses	40,300	163,100

If 1,900 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the variable costing balance sheet?

a.$93,366

b.$79,841

c.$67,298

d.$76,705

Q23:

The level of inventory of a manufactured product has increased by 8,091 units during a period. The following data are also available:

	Variable	Fixed
Unit manufacturing costs of the period	$13	$8
Unit operating expenses of the period	$2	$3

What would be the effect on income from operations if absorption costing is used rather than variable costing?

a.$89,001 increase

b.$89,001 decrease

c.$64,728 increase

d.$64,728 decrease