Sorter Company Has Provided the Following Data for the Third

question 27

Multiple Choice

Sorter Company has provided the following data for the third quarter of the most recent year:
$\begin{array}{|l|r|}\hline \text { Sales } & \$ 500,000 \\\hline \text { Fixed Manufacturing Overhead } & 55,000 \\\hline \text { Direct Labour } & 72,500 \\\hline \text { Fixed Selling Expenses } & 46,250 \\\hline \text { Variable Manufacturing Overhead } & 41,000 \\\hline \text { Variable Administrative Expenses } & 48,000 \\\hline \text { Direct Materials } & 51,500 \\\hline \text { Fixed Administrative Expenses } & 44,500 \\\hline \text { Variable Selling Expenses } & 49,750\\\hline \end{array}$ Assume that direct labour is a variable cost and that there was no beginning or ending inventories.



-Which of the following items of Sorter Company's expenses and/or costs can be misleading if reported on a per unit of production and/or sales basis?

• A) Direct labour
• B) Direct materials.
• C) Variable administrative expenses.
• D) Fixed manufacturing overhead.

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Definitions:

Buffer Zones

Areas created to separate incompatible uses or to protect sensitive areas, often used for environmental protection or to reduce conflicts.

Transition Zone

A region within the Earth's mantle between the upper mantle and the lower mantle, characterized by changes in seismic velocity.

Drinking Water

Water that is safe for humans to ingest.