Allison's Auto Art Is a Company That Applies Pinstripes to Vehicles.Allison's

question 73

Multiple Choice

Allison's Auto Art is a company that applies pinstripes to vehicles.Allison's cost for a basic 1-color pinstriping job is $35, and she charges $95 for this service.For a total price of $175, Allison will apply a fancier 3-color pinstripe application to an automobile, a service that adds an additional $40 to the total cost of the package.What is the marginal cost of moving up from the 1-color application to the 3-color application?

• A)$35
• B)$40
• C)$80
• D)$175

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Definitions:

Contra Account

An account used in an accounting system to offset a related account, commonly used to record depreciation, allowances, and discounts.

Normal Balance

The side of an account, either debit or credit, where increases to the account are recorded.

Accrued Expense

Expenses that have been incurred but not yet paid or documented in the financial statements through an accounting process.

Land

A natural resource that denotes the earth's surface not covered by water, as well as the rights to use this surface.