(Solved): 1 LPS Corporation's management has budgeted the following amounts for its next fiscal year: Total f ...

1 LPS Corporation's management has budgeted the following amounts for its next fiscal year: Total fixed expenses Selling price per unit Variable expenses per unit $500,000 $50 $15 If LPS Corporation spends an additional $21,000 on advertising, sales volume should increase by 5,000 units. What effect will this have on operating income? O A. Decrease of $154,000 OB. Increase of $154,000 O c. Decrease of $175,000 OD. Increase of $175,000 2 With managers look at the size of the variances between actual results and budgeted amounts to determine which variances a manager should investigate. O A. management by budget OB. management by decision O C. management by exception OD. management by variance 3 Which of the following is an underlying assumption of the cost - volume - profit graph? O A. Volume is the only cost driver. OB. The sales mix of products is constantly changing. O C. Total fixed expenses will change during the accounting period. OD. Inventory levels are constantly changing. 4 The manager at Screaming Trees has been trying to calculate the portion of the company's overhead expenses that is fixed and the portion that is variable. Over the past twelve months, the number of yards of mulch processed was highest in July, when the total monthly overhead costs totaled $32,000 for 36,000 yards of mulch processed. The lowest number of yards of mulch processed in the last twelve months occurred in October, when total overhead costs were $26,000 for 25,000 yards of mulch processed. What was the variable cost per yard? O A. $0.89 B. $1.04 OOOO OC. $0.55 D. $1.83