Violet Sales Corp, reports the year end information from 2018 as follows: Sales (35,250 units) Cost of goods sold Gross margin Operating expenses Operating income $282,000 106,000 176,000 153,000 $23,000 Violet is developing the 2019 budget. In 2019 the company would like to increase selling prices by 4.5%, and as a result expects a decrease in sales volume of 15%. All other operating expenses are expected to remain constant. Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost. Should Violet increase the selling price in 2019? A. No, because operating income decreases for 2019. B. No, because sales volume decreases for 2019. C. Yes, because sales revenue increases for 2019. D. Yes, because gross margin increases for 2019. Extracts from cost information of Hebar Corp.: Setup cost allocated using direct labor hours Setup cost allocated using setup - hours Simple L3 Pack $19,600 $13,800 Complex L7 Pack $9,400 $15,200 Total $29,000 $29,000 Assuming that setup - hours is considered a more effective cost drive for allocating setup costs than direct labor hours. Which of the following statements is true of Hebar's setup costs under traditional costing? O A. L7 pack is overcosted by $5,800 B. L3 pack is overcosted by $5,800 O C. L3 pack is undercosted by $5,800 OD. L7 pack is undercosted by $5,700 Handley Manufacturing Company has prepared the following flexible budget for August and is in the process of interpreting the variances. F denotes a favorable variance and U denotes an unfavorable variance. Variances Material A Material B Direct manufacturing labor Flexible Budget $43,000 62,000 86,000 Price $1,200F 300U 500U Efficiency $3,700U 2,000F 2,700F The actual amount spent for Material B was A. $60,300 B. $62,000 C. $59,700 D. $63,700