Zenith Corporation Sells Some of Its Used Store Fixtures

question 82

Multiple Choice

Zenith Corporation sells some of its used store fixtures.The acquisition cost of the fixtures is $12,500 the accumulated depreciation on these fixtures is $9,750 at the time of sale.The fixtures are sold for $5,300.The value of this transaction in the investing section of the statement of cash flows is

• A)$12,500
• B)$5,300
• C)$2,750
• D)$2,550

---

Definitions:

Absorption Costing

An inventory pricing approach that incorporates all costs associated with manufacturing, including both variable and fixed expenses, into the product's cost.

Variable Costing

An accounting method that includes only variable production costs in the cost of goods sold and treats fixed overhead expenses as period costs.

Direct Materials

Raw materials directly used in the manufacturing of a product that can be directly traced to that product.

Variable Overhead

Variable overhead refers to the indirect costs of production that fluctuate with the level of output, such as utilities and materials.