Jones Ice Cream Stand Is Operated by Mr

question 304

Multiple Choice

Jones Ice Cream Stand is operated by Mr. Jones and experiences different sales patterns throughout the year. To plan for the future, Mr. Jones wants to determine its cost behavior patterns. He has the following information available about the ice cream stand's operating costs and the number of soft serve cones served. Using the high-low method, the fixed costs for a month are

• A)$900
• B)$3900
• C)$1200
• D)$1500

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Definitions:

Operating Activities

Transactions and other events that are not investing or financing activities, relating to the primary operations of a business.

Financing Activities

Activities that result in changes in the size and composition of the equity capital and borrowings of a company.

Operating Activities

The day-to-day actions taken by a business, such as selling products, managing costs, and paying bills, that are essential to running the business and generating income.

Production

The process of creating, growing, manufacturing, or improving goods and services.