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John Assembles Computers for the Computer Systems to Go Company

question 37

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John assembles computers for the Computer Systems to Go Company. His company purchases Pentium MMX™ chips from Intel. When John is installing the chip it is inventory, but for Intel it is inventory.


Definitions:

Monthly Profit

The total revenue of a business minus the total expenses for the month, indicating the financial gain.

Variable Cost

Costs that change in proportion to the level of production or business activity, such as materials and labor.

Variable Cost

Costs that vary in direct proportion to changes in levels of production or business activity, such as materials and labor.

Fixed Cost

A cost that does not change with the volume of sales.

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