1. In business, a budget is a method for putting a limit on spending. True or False. Please explain.
2. Last year, Rudy Corp's variable costing net operating income was $63,200. Fixed manufacturing overhead costs deferred in inventory under absorption costing amounted to $31,900. What was the absorption costing net operating income last year?
a. 31,900
b. 63,200
c. $31,300
d. $95,100
(Please Show Work)
3. Multon Corporation produces a single product. At the end of the company's first year of operations, 1,000 units of inventory remained on hand. Its variable manufacturing overhead cost is $45 per unit and its fixed manufacturing overhead cost is $10 per unit. Yuvil's absorption costing net operating income would be higher than its variable costing net operating income by:
a. $45,000
b. $10,000
c. $0
d. $35,000
(Please Show Work)
4. Brummitt Corporation has two divisions: the BAJ Division and the CBB Division. The corporation's net operating income is $10,700. The BAJ Division's divisional segment margin is $76,100 and the CBB Division's divisional segment margin is $42,300. What is the amount of the common fixed expense not traceable to the individual divisions?
a. $53,000
b. $86,800
c. $118,400
d. $107,700
(Please Show Work)
5. Under variable costing, which of the following is not expensed in its entirety in the period in which it is incurred?
a. variable manufacturing overhead cost
b. Fixed manufacturing overhead cost
c. fixed selling and administrative expense
d. variable selling and administrative expense
(Please explain)