The Following Data Pertains to Activity and Costs for Two

question 7

Multiple Choice

The following data pertains to activity and costs for two months: $$\begin{array} { | l | l | l | } \hline & \text { June } & \text { July } \\\hline \text { Activity level in units } & 10,000 & 20,000 \\\hline & & \\\hline \text { Variable costs } & \$ 20,000 & \$ ? \\\hline \text { Fixed costs } & 15,000 & ? \\\hline \text { Mixed costs } & 10,000 & ? \\\hline \text { Total costs } & \$ 45,000 & \$ 70,000 \\\hline\end{array}$$ Assuming that these activity levels are within the relevant range, the mixed costs for July were?

• A)$40,000.
• B)$10,000.
• C)$35,000.
• D)$15,000.

---

Definitions:

Allowance for Doubtful Accounts

An accounting provision made by companies to account for anticipated losses due to customers' failure to pay owed amounts.

Net Realizable Value

The estimated selling price in the ordinary course of business, minus reasonably predictable costs of completion, disposal, and transportation.

Uncollectible Accounts

Accounts receivable that are determined to be uncollectible from debtors, leading to them being written off as a business loss.

Allowance Method

An accounting technique that estimates and deducts accounts receivable deemed to be uncollectible from total receivables, creating an allowance for doubtful accounts.