Quiz 1_Solution - 6A:130 Spring 2008 Quiz 1_Solution Name:...

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6A:130 – Spring 2008 Quiz 1_Solution Name: SOLUTION Class Time: 1:05 ____ or 2:20 ____ Quiz 1 is due at the beginning of class on Tuesday, February 12, 2008. If you do not show your work, you will receive zero (0) points. Micro Vehicles converts Honda Elements into luxury, high-security vehicles by adding a computerized alarm and radar system and various luxury components. The finished vehicles are sold for $100,000 each. Variable production costs (including the cost of the Element) approximate $60,000 per vehicle. Fixed production costs are also $60,000 per month. The fixed costs for administrative and selling expenses are $20,000 per month plus $5,000 per vehicle sold. At the beginning of year (January 1) Micro had no inventories of finished vehicles. During January it produced four (4) vehicles and sold three (3). In February it produced five (5) and sold six (6). 1. What is January’s operating income if Micro uses a variable costing system?
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This note was uploaded on 04/07/2008 for the course ACCT 130 taught by Professor Hartman during the Fall '07 term at University of Iowa.

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Quiz 1_Solution - 6A:130 Spring 2008 Quiz 1_Solution Name:...

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