10. Fletcher, Inc. produces hair brushes. The selling price is $20 per unit and
ID: 2443390 • Letter: 1
Question
10. Fletcher, Inc. produces hair brushes. The selling price is $20 per unit and the variable costs are $8 per brush. Fixed costs per month are $4,800. If Fletcher sells 20 more units beyond breakeven, how much does profit increase as a result?A) $240
B) $400
C) $160
D) $800
12. Companies that use just-in-time processing techniques will
A) have greater differences between absorption and variable costing net income.
B) have smaller differences between absorption and variable costing net income.
C) not be able to use absorption costing.
D) not be able to use variable costing.
15. If a division manager's compensation is based upon the division's net income, the manager may decide to meet the net income targets by increasing production when using
A) variable costing, in order to increase net income.
B) variable costing, in order to decrease net income.
C) absorption costing, in order to increase net income.
D) absorption costing, in order to decrease net income.
Explanation / Answer
10)Option " a' is the correct answer Since sales 20 less: variable cost 8 Contributon per unit = $12 Break evenpoint : No profit and no loss point . Beyoynd that point ,the every unit of sale would carry profit ,it should multiply with contribution per unit. = 12 *20 units = $240 12) option "a" is the correct answer. have greater differences between absorption and variable costing net income.since while using JIT in the firms the closing stock will not be maintained. So the Net income would be differs greatly from absorbtion costing to variable costing. 15) option "c" is the cotrrect answer.
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