If the Assets Could Be Sold for $228,000 and There

question 29

Multiple Choice

If the assets could be sold for $228,000 and there are no liquidation expenses, what is the minimum amount that Ezzard would receive from the liquidation?

• A) $36,000.
• B) $ 0.
• C) $ 2,500.
• D) $38,250.
• E) $67,250.

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Definitions:

Variable Overhead

Refers to the costs of production that fluctuate with the level of output, such as utilities and materials, that do not have a fixed price associated with production levels.

Direct Labor-hours

The total hours worked by employees directly involved in the production process, used as a basis for allocating costs to products.

Variable Manufacturing Overhead

Costs that vary with production output levels, such as utilities for the production facility, which are not directly tied to specific units of production.

Materials Price Variance

The difference between the actual cost of materials used in production and the expected (standard) cost of those materials.