Section I: Do on SCANTRON sheet.
ONLY SCANTRON circles graded (15 x 1=15 points).
1. Armaggio Industries reported the following data for the year just ended: sales revenue,
$950,000; cost of goods sold, $420,000; cost of goods manufactured, $330,000; and
selling and administrative expenses, $170,000.
Assuming no other expenses,
Armaggio's income would be:
2. The salary that is sacrificed by a college student who pursues a degree full time is a(n):
A) sunk cost.
B) out-of-pocket cost.
C) opportunity cost.
D) differential cost.
E) marginal cost.
3. Under a traditional costing system, which of the following costs would likely be
classified as indirect with respect to the various products manufactured?
A) Plant maintenance.
B) Factory supplies.
D) Machinery depreciation.
E) All of the above would be considered indirect costs.
4. Baxter Company, which pays a 10% commission to its salespeople, reported sales
revenues of $210,000 for the period just ended. If the commission is the only variable
sales expense, and if fixed and variable sales expenses totaled $56,000, what would they
total at sales of $168,000?
E) some other amount.