The Cost Components of a Heater Include $35 for the Compressor

question 126

Multiple Choice

The cost components of a heater include $35 for the compressor, $11 for the sheet molded compound frame, and $74 per unit for assembly. The factory machines and tools cost is $55,000. The company expects to produce 1,300 heaters in the coming year. What cost function best represents these costs?

• A) y = 55,000 + 120X
• B) y = 1,300 + 55,000X
• C) y = 55,000 + 1,300X
• D) y = 1,300 + 120X

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Definitions:

Supplies Expense

The cost associated with the consumption of supplies used in the operation of a business.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate period.

Inventory Supplies

Items or materials kept on hand by a business for the production process or for sale.

Unearned Revenue

Money received by a business for goods or services yet to be provided, recorded as a liability until earned.