The Following Information Is Available for Brendon Company Before Closing

question 56

Multiple Choice

The following information is available for Brendon Company before closing the accounts. What will be the amount in the Income Summary account that should be closed to Brendon, Capital? $$\begin{array} { | l | r | } \hline \text { J. Brendon, Capital } & \$ 112,000 \\\hline \text { J. Brendon, Withdrawals } & 32,000 \\\hline \text { Fees earned } & 187,000 \\\hline \text { Depreciation Expense-Equipment } & 12,000 \\\hline \text { Wages expense } & 71,400 \\\hline \text { Interest expense } & 3,300 \\\hline \text { Insurance expense } & 11,700 \\\hline \text { Rent expense } & 24,200 \\\hline\end{array}$$

• A)$80,000.
• B)$32,400.
• C)$42,400.
• D)$43,000.
• E)$64,400.

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Definitions:

Average Variable Cost

The total variable costs of production divided by the number of units produced, indicating the variable cost per unit.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.

Diseconomies of Scale

The phenomenon where production costs per unit increase as a firm or production process scales up, contrary to economies of scale where costs decrease.

Boeing

An American multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets, satellites, telecommunications equipment, and missiles worldwide.