Marvin Services Corporation Had the Following Accounts and Balances If the Balance of the Buildings Account Was $40000 and

question 64

Multiple Choice

Marvin Services Corporation had the following accounts and balances: $$\begin{array} { l r l r } \text { Accounts payable } & \$ 30,000 & \text { Equipment } & \$ 35,000 \\\text { Accounts receivable } & 5,000 & \text { Land } & 35,000 \\\text { Buil dings } & ? & \text { Unearned service revenue } & 10,000 \\\text { Cash } & 15,000 & \text { Total stockholders' equity } & ?\end{array}$$ If the balance of the Buildings account was $40000 and $10000 of Accounts Payable were paid in cash what would be the total liabilities and stockholders' equity?

• A)$90000
• B)$78000
• C)$80000
• D)$120000

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Definitions:

Fixed Manufacturing Overhead

The portion of manufacturing overhead costs that remains constant irrespective of the level of production, such as salaries of supervisors and rent for the factory building.

Variable Costing

A costing method that includes only variable production costs (costs that vary with output) in the cost of goods sold and excludes fixed overhead costs.

Variable Costing

A costing method that includes only variable production costs (materials, labor, and variable manufacturing overhead) in product costs, excluding fixed overhead.

Net Operating Income

The company's profit remaining after operating costs are removed, but prior to the deduction of taxes and interest.