During the Years 1 through 3, Powers, Incorporated, reported the following amounts of net income (dollars in thousands):

Year 3	Year 2	Year 1
$170	$150	$120

Relative to the prior year, the percentage change in net income:

Multiple Choice

• Was the same in Years 2 and 3.

• Was larger in Year 3 than in 2.

• Was smaller in Year 3 than in 2.

• Cannot be determined without knowing how many shares of stock were outstanding.

John Boyd Corporation manufactures and sells 1,000 tractors each month. The primary component in each tractor is the motor. John Boyd has the monthly capacity to produce 1,300 motors. The variable costs associated with manufacturing each motor are shown below:

Direct materials	$ 31
Direct labor	$ 23
Variable manufacturing overhead	$ 36

Fixed manufacturing overhead per month (for up to 1,300 units of production) averages $20,000. Joan Reid, Incorporated has offered to purchase 130 motors from John Boyd per month to be used in its own outboard motors.

What is the incremental cost of producing each additional motor?

Multiple Choice

• $54 per unit

• $90 per unit

• $110 per unit

• Some other amount

Which of the following is not considered an operating budget?

Multiple Choice

• Manufacturing cost budget

• Production schedule

• Capital expenditures budget

• Sales forecast