Which of the Following Transactions Is Represented by the Diagram

question 58

Multiple Choice

Which of the following transactions is represented by the diagram below?

• A) A junkyard holds weekly sales where it sells its entire inventory.
• B) A shoe store sells products to consumers.
• C) A stay-at-home mom creates furniture for doll houses. When one piece is finished, she sells it on Amazon.com.
• D) Netflix sells movies to consumers through its online downloading service.

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Definitions:

Production

The process of creating goods and services from various inputs like raw materials and labor.

Purchasing

The process of obtaining goods or services, usually for business purposes.

Cost Drivers

Factors that cause a change in the cost of an activity, impacting the economic amount associated with production or delivery of a service.

Variable Costs

Costs that vary in direct proportion to changes in production or sales volumes, such as raw materials and direct labor.