The following information has been taken from the cost records of Kelly Corporation for the past year: Raw material used in production $336 Total manufacturing costs charged to production during the year (includes direct material, direct labor, and overhead equal to 50% of direct labor cost) 711 Cost of goods available for sale 851 Selling and Administrative expenses 35 Inventories Beginning Ending Raw Material $80 $90 Work in Process 85 25 Finished Goods 80 105 Refer to Kelly Company. Direct labor cost charged to production during the year was Select one: a. $125 b. $188 c. $250 d. $375

Fanning company is considering the addition of a new product to its cosmetics line. the company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. relevant information and budgeted annual income statements for each of the products follow. skin cream bath oil color gel budgeted sales in units (a) 110,000 190,000 70,000 expected sales price (b) $8 $4 $11 variable costs per unit (c) $2 $2 $7 income statements sales revenue (a × b) $880,000 $760,000 $770,000 variable costs (a × c) (220,000) (380,000) (490,000) contribution margin 660,000 380,000 280,000 fixed costs (432,000) (240,000) (76,000) net income $228,000 $140,000 $204,000 required: (a) determine the margin of safety as a percentage for each product. (b) prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume. (c) for each product, determine the percentage change in net income that results from the 20 percent increase in sales. (d) assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? (e) assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line?