Answer all questions with multiple choice:

A. COGS would increase and Net Income would decline

B. COGS would decrease and Net Income would Increase

C. COGS would remain the same, but net income would decline.

D. COGS would remain the same, but Net income would increase.

E. There would be no change to Net Income or COGS.

1. What would happen if the ending inventory balance of sales team supplies was $0?

2. What would happen if the ending inventory balance of Woodstock (Direct Material) was increased to $45,489 (from 35,489)?

3. What would happen if the beginning inventory balance of Work-in-Process was $248,645 (instead of 258,645)?

4. What would happen if the beginning inventory balance of Work-in-Process was decreased by $10,000, and purchases of Woodstock (DM) was increased by $10,000?

Swanson Woodworking Raw Material BB $ 50,756 TI S 83,523 $ 98,790 TO EB $ 35,489 Fact Pattern Sales $402,356 Rev Woodstock (Direct Mat) $ 83,523 Mft Woodworking Supplies $ 16,234 Mft Sales Team Supplies $ 902 SG&A Office Manager Salary $ 15,667 SG&A Woodworker Salaries $ 90,000 Mft Woodworker Benefits $ 31,745 Mft Ron Swanson's Salary $ 3 Mft Depreciation on Woodshop $ 75,000 Mft Depreciation on Office $ 6,000 SG&A Woodshop Maintenance $ 8,143 Mft Woodshop Utilities $ 12,543 Mft Office Maintenance $ 2,450 SG&A Office Utilities $ 1,650 SG&A Woodshop Equipment Rent $ 9,333 Mft Sales Commissions $ 6,542 SG&A Direct Labor TI $ 90,000 $ 90,000 TO Work-in-Process BB $ 258,645 DM $ 98,790 DL $ 90,000 OH $ 150,851 $ 302,440 TO EB $ 295,846 Finished Goods BB $ 23,500 Ti $ 302,440 $ 312,440 TO EB $ 13,500 Income Statement Revenue $ 402,356 COGS $(312,440) Gross Margin $ 89,916 SG&A (32,936) Net Income $ 56,980 Overhead Woodworker Benefits $ 31,745 Ron Swanson's Salary $ 3 Depreciation on Woodshop $ 75,000 Woodshop Maintenance $ 8,143 Woodshop Utilities $ 12,543 Woodshop Equipment Rent $ 9,333 Woodworking Supplies $ 14,084 $ 150,851 TO Woodworking Supplies BBS 8,054 TI $ 16,234 $ 14,084 TO EB $ 10,204 Woodstock (Direct Mat) Woodworking Supplies Sales Team Supplies Work-in-Process Finished Goods 1/1/21 3/31/22 $ 50,756 $ 35,489 $ 8,054 $10,204 $ $ 550 $ $ 825 $ 258,645 $295,846 $ 23,500 $ 13,500 SG&A Office Manager Salary $ 15,667 Depreciation on Office $ 6,000 Office Maintenance $ $ 2,450 Office Utilities $ 1,650 Sales Commissions $ 6,542 $ 32,936 TO Sales Team Supplies $ 627 Sales Team Supplies BB $ 550 TI $ 902 $ 627 TO EB $ 825