1. A company's operating income was $72,500 using variable costing for a given period. Beginning and ending inventories for that period were 45,500 units and 50,500 units, respectively. Ignoring income taxes, if the fixed factory overhead application rate was $8.05 per unit, what would operating income have been using full costing?

Multiple Choice

$31,125.

$112,750.

$145,000.

Cannot be determined from the information given.

$101,000.

2. In properly developing formal systems at the team level that will have the desired impact on employees' performance, the management accountant should recognize any existing informal systems and:

Multiple Choice

Try to eliminate them prior to system development.

Simply formalize them into the system being developed.

Consider cultural aspects in development of the formal system.

Not let cultural aspects affect system development.

Make plans to eliminate these informal systems.