Charles Charcuterie and Cheese Shop Purchased 100 Pounds of Cheese

question 155

Multiple Choice

Charles Charcuterie and Cheese Shop purchased 100 pounds of cheese on account for $1250 from Murray's Cheese Shoppe.Analyze the effect of this event on Charles' tabular analysis.

• A)Increase Cash $1250 and increase Revenue $1250.
• B)Decrease Cash $1250 and increase Expenses $1250.
• C)Increase Accounts Payable $1250 and increases Inventory $1250.
• D)This event is not a transaction entered into the tabular analysis.

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Definitions:

Direct Materials

Raw materials that are directly traceable to the production of specific goods or services and are an integral part of the finished product.

Variable Factory Overhead

Variable factory overhead consists of production costs that vary with the level of output, such as utilities and indirect materials.

Fixed Costs

Costs that tend to remain the same in amount, regardless of variations in the level of activity.

Differential Revenue

The additional revenue generated from choosing one alternative over another in decision-making processes.