1. Which of the following statements is correct?
a. Changes in accounting principle are always handled in the current or prospective period.
b. Prior statements should be restated for changes in accounting estimates.
c. A change from expensing certain costs to capitalizing these costs due to a change in the period benefited should be handled as a change in accounting estimate.
d. Correction of an error related to a prior period should be considered as an adjustment to current year net income.
2. What is the unit cost for the direct materials for 2011, assuming 500,000 units are produced direct materials costs ate $4.30 per unit when 200,000 units are produced? (please show work)
a.$5.72
b.$1.72
c.$10.75
d. $4.30