Use the Following Five Transactions for Monaco & Associates, Inc

question 88

Multiple Choice

Use the following five transactions for Monaco & Associates, Inc.to answer the question(s) . $$\begin{array}{lll}october&1&\text { Bills are sent to clients for services provided in September in the amount of \$ 800 .}\\&9&\text { Dravo Co. delivers office fumiture (\$ 1,060) and office supplies (\$ 160) to }\\&&\text { Monaco leaving an invoice for \$ 1,220 .}\\&15&\text { Payment is made to Dravo Co. for the furniture and office supplies delivered }\\&&\text { on October 9.}\\&23&\text { A bill for \$ 430 for electricity for the month of September is received and will }\\&&\text { be paid on its due date in November.}\\&31&\text { Salaries of \$ 850 are paid to employees.}\\\end{array}$$
-See the transactions to Monaco & Associates. The journal entry to record the October 15 transaction will include a debit of $1,220 to

• A) Salaries Expense
• B) Salaries Payable
• C) Prepaid Expenses
• D) Accounts Payable

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Definitions:

Contribution Margin

Contribution margin is the amount remaining from sales revenue after variable expenses are deducted, showing how much contributes to covering fixed costs and profit.

Fixed Costs

Costs that remain constant regardless of a company's operational levels, including rent, wages, and insurance fees.

Absorption Costing

An approach for assigning costs to a product that integrates all aspects of manufacturing expenses, from direct materials and labor to both types of overheads - fixed and variable.

Direct Materials

Direct materials are raw materials that can be directly attributed to the production of specific goods or services.