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The following information is available from the records for John Corporation. The information pertaines to production...

The following information is available from the records for John Corporation. The information pertaines to production activity, sales activity and cost incurred for the last two months. All data in the table as well as in the statements that follow are rounded of to two decimal places. Select all statements that are TRUE. Assume that the beginning and ending WIP inventory and beginning FG inventory for Month 1 equal zero. Also assume that the ending WIP inventory and ending FG inventory for month 2 equal zero. The variable portion of SGA cost is the sales commission that is paid to the salesmen on a per unit basis.
Month 1 Month 2
Production quantity (in units) 1,000 1,200
Direct materials cost $5,000.00 $6,000.00
Direct labor cost $2,000.00 $2,400.00
Manufacturing overhead $6,000.00 $7,000.00
Selling and General Administrative cost $2,500.00 $2,700.00
# of units sold 800
Selling price $20.00 $20.00
A.
Conversion costs increased by 17.5% from month 1 to month 2
B.
Period costs increased by 20% from month 1 to month 2
C.
Gross margin increased by 20% from month 1 to month 2
D.
Operating income increased by 135.48% from month 1 to month 2
E.
Variable cost per unit remained the same in both the months.

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Expert Solution

ekkarill92 answered 2 years ago
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