Question

1. The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31:

	Rails    Division	Locomotive    Division	Corporate    Total
Cost of goods sold	$46,800	$31,400
Direct operating expenses	27,800	22,600
Sales	92,100	68,900
Interest expense			$2,100
General overhead			18,900
Income tax			4,300

The income from operations for the Rails Division is

a.$64,300

b.$92,100

c.$45,300

d.$17,500

2. Jase Manufacturing Co.'s static budget at 7,500 units of production includes $22,500 for direct labor and $2,250 for electric power. Total fixed costs are $37,100. At 10,800 units of production, a flexible budget would show

a.variable costs of $24,750 and $37,100

b.variable costs of $35,640 and $53,424 of fixed costs

c.variable costs of $35,640 and $37,100 of fixed costs

d.variable and fixed costs totaling $61,850

Answer 1