If Variable Cost of Goods Sold Totaled $90,000 for the Year

question 111

Multiple Choice

If variable cost of goods sold totaled $90,000 for the year (18,000 units at $5.00 each) and the planned variable cost of goods sold totaled $86,400 (16,000 units at $5.40 each) ,the effect of the quantity factor on the change in contribution margin is:

• A) $10,800 decrease
• B) $10,800 increase
• C) $10,000 increase
• D) $10,000 decrease

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Definitions:

Employer's Payroll Taxes Expenses

Employer's payroll taxes expenses refer to the taxes that employers are required to pay on behalf of their employees, including social security, Medicare taxes, and federal and state unemployment taxes.

FICA Tax

Federal Insurance Contributions Act tax, a U.S. payroll tax deducted to fund the Social Security and Medicare programs.

FUTA Tax

The Federal Unemployment Tax Act tax, paid by employers to fund the unemployment account of the federal government.

SUTA Tax

State Unemployment Tax Act tax, a payroll tax paid by employers to fund the state unemployment insurance program.