question 7

Answer: A is the correct answer.

Osawas operaating income using variable costing is
salesfrom operation is 120000*40=4800,000$.After deducting variable cost
(200000*30)6000,000$ ,fixed manufacturing cost and selling and administration cost
total 1000,000$ and after adding closing inventory (80000*30)2400000$ operating
income comes to 200,000$.In variable costing fixed manufacturing cost is treated as
period cost.Cost of production is 30$ per unit.

Question 8
Answer:B is the correct answer.
Oswas operting income using absorption ncosting is:-
Sales from operation is 120000*40=4800,000.A variable
cost(200.000*30)6000,000$,fixed manufacturing cost 600.000$ production cost comes
to 6600,000$.After deducting closing inventory(33*80000)2640,000$ from cost of
productioncost of goods sold arrive to 3960,000$.add selling adminstiration expense
results total cost 4360,000$.Therefore operating income sales -total
cost(4800,0000-4360,000) is 440,000$.