SE_Ch08 (1)

SE_Ch08 (1) - SAMPLE EXAM: CHAPTER 8 *SEE SOLUTION AT END...

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***SEE SOLUTION AT END OF FILE*** USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT 4 QUESTIONS: Princeton Corp. has made the following information available for the current year: Variable Costs per unit: Direct materials $10.00 Direct labor $ 8.00 Variable overhead $ 7.00 Selling Costs $ 5.00 Fixed costs (in total) Production $142,800 Selling and Administrative costs $221,200 Princeton produced 20,000 units and sold 17,850 units. Princeton sells its products for $70.00 per unit. Assume Princeton had no beginning inventories. 1. What is net income using variable costing? a. $571,200 b. $365,351 c. $350,000 d. $285,500 e. none of the above 2. What is net income using absorption costing? a. $571,200 b. $365,351 c. $350,000 d. $285,500 e. none of the above 3. What is the value of the ending inventory using absorption costing? a. $10,750 b. $64,500 c. $69,101 d. $70,950 e. $79,851 4. What is the total fixed cost expensed on the income statement under variable costing? a.
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This note was uploaded on 11/22/2011 for the course ACCT 230 taught by Professor Allen during the Fall '08 term at Texas A&M.

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SE_Ch08 (1) - SAMPLE EXAM: CHAPTER 8 *SEE SOLUTION AT END...

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