Kevin Jarvis Is the Controller of Bitterroot Industries

question 32

Multiple Choice

Kevin Jarvis is the controller of Bitterroot Industries.Kevin prepared the following budgeted income statement at various levels of sales.After careful review of the budgeted income statements,and after discussions with the sales and production managers,the CEO determines that the best alternative is to base the budget on a sales volume of 30,000

• A)$5,600 favorable
• B)$5,600 unfavorable
• C)$30,400 favorable
• D)$34,000 unfavorable

---

Definitions:

Capital

Financial assets or the financial value of assets, such as cash and securities, owned by a business or individual, used for creating wealth or to engage in further production.

Revenue

The total amount of money earned by a business from its normal business operations, before any expenses are subtracted.

Credit Balance

An accounting situation where the sum of credits in an account exceeds the sum of debits, often seen in liability and revenue accounts.

Income Summary

An account used in the closing process that aggregates all revenues and expenses to determine the overall profit or loss.