Determine the Net Income of a Company for Which the Following

question 251

Multiple Choice

Determine the net income of a company for which the following information is available for the month of September. $$\begin{array} { l r } \text { Service revenue } & \$ 300,000 \\\text { Rent expense } & 48,000 \\\text { Utilities expense } & 3,200 \\\text { Salaries expense } & 81,000\end{array}$$

• A) $171,000.
• B) $252,000.
• C) $167,800.
• D) $263,800.
• E) $432,200.

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Definitions:

Planning Budget

A budget created at the beginning of the budgeting period that is valid only for the planned level of activity.

Budgeted Overhead Cost

The anticipated indirect costs of production planned for a specific period, often part of a company's operating budget.

Variable Overhead Costs

Expenses that fluctuate with production volume, such as utilities or raw materials, which are not directly linked to a specific unit of production.

Number of Guests

Refers to the count of individuals attending an event or accommodated by a service, such as in a hotel or restaurant.