Blu Lightning Co

question 89

Essay

Blu Lightning Co. performed testing services for the Cheetah Co. Blu Lightning Co. billed Cheetah Co. $5,000. Enter the appropriate amounts into the accounting equation format.

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Definitions:

Variable Cost

Costs that vary in direct proportion to changes in the level of production or activity within a business.

Carrying Cost

The total cost of holding inventory, including storage, insurance, and taxes, among other expenses.

Fixed Cost

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Product

Anything that can be offered to a market to satisfy the desire or need of a customer.