Joe,Jeff and Jerry Frank Own Frank Brothers Farm,a Seed Company

question 240

Multiple Choice

Joe,Jeff and Jerry Frank own Frank Brothers Farm,a seed company specializing in seed corn.At their weekly meeting they tried to calculate the portion of the farm's overhead expenses that is fixed and the portion that is variable.Over the past twelve months,the number of bushels of seed corn that has been sold reached its peak in May,when the total monthly overhead costs totaled $250,000 for 95,000 bushels of seed corn sold.The lowest number of bushels sold in the last twelve months occurred in December,when total overhead costs were $75,000 for 7,500 bushels sold.What is the fixed portion of the monthly overhead expenses?

• A)$60,000
• B)$242,500
• C)$190,000
• D)$75,000

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Definitions:

Documentation

Written or digital materials that provide official information or evidence regarding processes, transactions, or systems.

Journalizing

The process of recording transactions in a journal so that their effects are reflected in the accounting records.

Transaction Data

Information collected about each specific activity that takes place within a business, which can be used for various financial and management analysis purposes.

Journal

A daily record of financial transactions, providing a detailed account of all entries for each transaction.