In order to prepare a contribution format income statement, costs must be separated into:

Monster’s Inc. manufactures coffee mugs. They are considering whether or not they should continue to make the mugs, or if they should outsource their production. If they outsource, they will still be responsible for storing and selling the mugs. Determine if the following costs are relevant to the Outsourcing Decision (Make or Buy)

Which of the following transactions is a period cost that would cause net income to decrease?

Which of the following is a product cost for a construction company?

Which of the following costs are never relevant?

Which of the following costs are never relevant?

Tweety’s Trinkets produces a single product with a direct material cost of $20 per unit, allocated fixed costs of $6 per unit, and direct labor cost of $12 per unit. They could instead purchase the product from a supplier for $30 per unit. Which of the following is the correct decision that should be made, and what is the effect on income if management is looking to make/purchase 5,000 units?

Which of the following costs is not considered to be a period cost?

During its first year of operations, Aperture Science, Inc. paid $18,000 for production worker wages and $21,000 in direct material. Utilities and lease payments for the administrative offices were $5,000. Utilities and lease payments for the production facilities were $10,000. Other selling and administrative expenses were $4,000. The company produced 7,000 units and sold 5,000 units at a price of $25 per unit. 1) What is Aperture’s total product cost for the period?   2) What is the product cost per unit for the period?

As production levels increase, variable cost: