The Following Entries Were Made by the Accountant of Patel

question 51

Multiple Choice

The following entries were made by the accountant of Patel Pastries during its first month of operation. 1. James Patel, the owner, deposited $3 000 in the business new bank account.
2. Patel Pastries paid the first month's rent of $400 in cash.
3. Patel Pastries purchased equipment by borrowing $11 000.
4. Cash sales for the month were $4 500.
5. Patel Pastries purchased cooking supplies for $1 400 cash.
After the accountant posts these entries to the general ledger, how much are total assets?

• A)$7 100
• B)$16 700
• C)$18 100
• D)$6 100

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Definitions:

Fixed Manufacturing Cost

Costs that do not change with the level of production, such as rent, salaries, and equipment depreciation.

Manufacturing Overhead

All manufacturing costs incurred during the production process that cannot be directly attributed to specific units produced, such as utilities, maintenance, and factory supplies.

Total Variable Cost

The total of variable costs involved in the production of goods or services, which change in proportion to the level of production or activity.

Total Fixed Cost

The sum of all costs required to produce any product or service, which remain unchanged regardless of the company's level of production or output.