Answer the Following Questions Using the Information Below:
Healesville Animates

question 107

Multiple Choice

Answer the following questions using the information below:
Healesville Animates produces and sells a luxury animal pillow for $40.00 per unit.In the first month of operation,3000 units were produced and 2250 units were sold.Actual fixed costs are the same as the amount budgeted for the month.Other information for the month includes:
$\begin{array}{ll}\text { Variable manufacturing costs } & \$ 19 \text { per unit } \\\text { Variable marketing costs } & \$ 1 \text { per unit } \\\text { Fixed manufacturing costs } & \$ 30000 \text { per month } \\\text { Administrative expenses, all fixed } & \$ 6000 \text { per month } \\\text { Ending inventories: } &\\text { Direct materials } & -0- \\\text { WIP } & -0- \\\text { Finished goods } & 750 \text { units }\end{array}$
-When comparing the operating profits between absorption costing and variable costing,and beginning finished inventory exceeds ending finished inventory,it may be assumed that:

• A)variable costing operating profit exceeds absorption costing operating profit
• B)variable cost per unit is less than fixed cost per unit
• C)there is an unfavourable production-volume variance
• D)sales increased during the period

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