1. The Clyde Corporation's variable expenses are 35% of sales. Clyde Corporation is contemplating an advertising campaign that will cost $25,000. If sales increase by $75,000, the company's net operating income will increase by how much?
2. All other things the same, an increase in variable expense per unit will reduce the break-even point.
True or False. Please explain
3. In the cost reconciliation report under the FIFO method, the costs to be accounted for equals the cost of ending work in process inventory plus the cost of units transferred out.
True or False. Please explain
4. In November, one of the processing departments at Goodsell Corporation had beginning work in process inventory of $36,000 and ending work in process inventory of $35,000. During the month, $427,000 of costs was added to production and the cost of units transferred out from the department was $428,000. The company uses the FIFO method in its process costing system. In the department's cost reconciliation report for November, the total cost to be accounted for would be?
5. Barraza Corporation uses a weighted-average process costing system. Barraza has two direct materials. One of these materials is added at the beginning of the production process. The other material is added when processing is 50% complete. When will the equivalent units of production for these two materials be equal?
a. when processing on ending WIP is less than 50% complete
b. when processing on beginning WIP is more than 50% complete at the start of the period
c. when processing on beginning WIP is less than 50% at the start of the period
d. when processing on the ending WIP is over 50% complete
6. The "costs accounted for" portion of the cost reconciliation report includes the cost of beginning work in process inventory and the costs added to production during the period.
True or Fals. Please Explain.