Coil CorpReports Operating Expenses in Two Categories: (1) Selling and (2)

question 58

Multiple Choice

Coil Corp.reports operating expenses in two categories: (1) selling and (2) general and administrative.The adjusted trial balance at December 31, 2011 included the following expense and loss accounts: One-half of the rented premises is occupied by the sales department.Coil's total selling expenses for 2011 are

• A)$500,000.
• B)$420,000.
• C)$390,000.
• D)$350,000.

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Definitions:

Unit Variable Expenses

Costs that vary directly with the volume of production or sales per unit.

Fixed Expenses

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

Variable Expenses

Expenses that vary directly with the level of production or sales volume, such as raw materials and direct labor costs.

Net Income

The profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.