A Purchase of Common Stock of Blue Wave Corporation for $14,500

question 19

Multiple Choice

A purchase of common stock of Blue Wave Corporation for $14,500 was sold three months later for $15,000. The entry to record the sale would include a

• A) debit to Cash of $14,500.
• B) credit to Gain on Sale of Stock Investments of $500.
• C) credit to Stock Investments of $15,000.
• D) credit to Interest Revenue of $500.

---

Definitions:

Total Variable Cost

Represents the sum of all costs that vary with the level of output production, excluding fixed costs.

Total Cost

The sum of all costs associated with the production of a specific quantity of a good or service, including both fixed and variable costs.

ATC

Average Total Cost, a financial metric calculated by dividing total cost by the quantity of output produced, illustrating the average cost per unit of output.

AVC

Average Variable Cost is the total variable costs divided by the quantity of output produced.