Barbara Owns a Small Shop Where Dresses Are Made

question 251

Multiple Choice

Barbara owns a small shop where dresses are made. At the end of a given month, she has 250 dresses. Her expenses for the month are $1,000 for rent, $6,000 for wages, $1,500 for fabric and thread, and $500 for electricity. Her total variable costs for the month are:

• A) c and e.
• B) $4,000.
• C) $32 per dress.
• D) $7,500.
• E) $8,000.

Comprehend the treatment and accounting of goods in transit and on consignment.

Understand how inventory errors affect financial reporting and the importance of physical inventory counts.

Appreciate the significance of inventory valuation adjustments for obsolete or damaged goods.

Grasp the principles behind the allocation of costs to cost of goods sold and inventory balance.

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Definitions:

Wear Indicating Device

A feature built into a brake pad or tire that provides a visual or audible warning when the component has worn down to its replacement limit.

Retraction Mechanism

A system designed to withdraw or pull back a part or component, commonly found in devices like seat belts or retractable pens.

Pad Wear

The natural wear and tear on brake pads over time due to friction when the brakes are applied, affecting brake performance and safety.

Brake Warning Light

An indicator on a vehicle's dashboard designed to alert the driver of issues within the braking system, such as low brake fluid level or a malfunction in the braking system.