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dates Corp. has the following information for its candy line Selling price per unit Unit sales Variable costs Fixed costs S 15 100,000 $800,000 S200,000 S 15 Based on a market study, Bates estimates that it could increase the unit selling price by 5% and increase the unit sales volume by 10% if $100,000) was spent on advertising. Based on the analysis, what would Bates' operating income be from selling the candy if the decision is made to advertise? a. $337,500 b. $417,500 c. $497,500 d. $717,500 Use the following to answer questions 5-6. Lorillard Corporation has the following information for April: April 12,500 8,730 Units produced Units sold There were no beginning inventories for April and production costs per unit (based on 12,500 units) are as follows: Direct materials Direct labor Variable factory overhead Fixed factory overbcad Variable selling and admin. expenses 10 7.50 12.50 Fixed selling and admin, expenses 5. What is the April 30 finished goods inventory cost for Lorillard Corporation using the absorption costing method? a. $140,625 b. S187,500 c. $121,875 d. $206,250 6. What is the April 30th finished goods inventory for Lorillard Corporation using the variable costing method? a. $140,625 b. $187,500 c. $121,875 d. $206,250 7. Restaurant Products produces two products, X and Y, in a single process. In 2011, the joint costs of this process were $25,000. In addition, 4,000 units of X and 6,000 units of Y were produced. Separable processing costs beyond the split- off point were X-$10,000; Y-$20,000. X sells for $10.00 per unit; Y sells for $7.50 per unit. What amount of joint costs will be allocated to Product X using the physical units method? b.S10,000 c. $25,000 d. $15,000

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