Allison and Josh Are Partners in a Business

question 123

Multiple Choice

Allison and Josh are partners in a business. Allison's capital is $60,000 and Josh's capital is $100,000. Profits for the year are $80,000. They agree to share profits and losses as follows: Allison's share of the profits before paying salaries and interest on capital is:

• A)$48,000.
• B)$22,000.
• C)$28,000.
• D)$28,400.

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Definitions:

Total Revenue Variance

The difference between the actual total revenue earned and the expected total revenue in a period.

Direct Materials Price Variance

The difference between the actual cost of direct materials and the standard cost, multiplied by the quantity purchased.

Direct Labor Rate Variance

The difference between the actual cost of direct labor and the expected (or standard) cost multiplied by the actual hours worked.

Actual Quantity

The real amount of materials, labor, or overhead used in production or service delivery, as opposed to budgeted or standard quantities.