A company has sales of $100,000, ending finished goods inventory of $9,000 variable manufacturing costs of $50,000 and fixed manufacturing costs of $28,000 for the year. Assuming the company uses direct costing, the manufacturing margin for the year is:
(A) 22,000
(B) 31,000
(C) 59,000
(D) 13,000
A segment of a business reported a contribution margin of $36,000 and controllable fixed costs of $12,000. If the segment had been eliminated the company-wide net income would gave been:
(A) 12,000 higher
(B) 24,000 lower
(C) 36,000 lower
(D) 24,000 higher
If a decision must be made to close a warehouse non-refundable prepaid rent on the warehouse is a (n) ----- cost.
(A) opportunity
(B) common
(C) sunk
(D) variable
When the balance in ending finished goods inventory increases, net income under absorption costing is:
(A) lower than under direct costing
(B) higher than under direct costing
(C) the same under direct costing
(D) unaffected by the increase
Which of the following costs amounts can be found in a firm's accounting records?
(A) opportunity costs
(B) differential costs
(C) incremental costs
(D) sunk costs
Which of the following is not true of the direct costing procedure?
(A) variable and fixed costs are considered as part of the cost of goods manufactured
(B) the cost of goods sold based solely on variable costs, is subtracted from net sales to arrive at the manufacturing margin
(C) variable selling expenses are deducted from the manufacturing margin
(D) variable administrative expenses are deducted from the manufacturing margin