Following Is a List of Account Balances of Surburban Lawn

question 76

Multiple Choice

Following is a list of account balances of Surburban Lawn Services as of December 31 of the first year of operation. $$\begin{array} { | l | r | } \hline \text { Accounts Receivable } & \$ 4,000 \\\hline \text { Accounts Payable } & 6,000 \\\hline \text { Salaries Expense } & 7,000 \\\hline \text { Repairs Expense } & 600 \\\hline \text { Truck } & 10,000 \\\hline \text { Equipment } & 9,000 \\\hline \text { Notes Payable } & 8,300 \\\hline \text { Cash } & 7,200 \\\hline \text { Supplies Expense } & 1,500 \\\hline \text { Service Revenue } & 31,000 \\\hline \text { Gasoline Expense } & 3,100 \\\hline \text { Salaries Payable } & 300 \\\hline\end{array}$$ What is the amount of total liabilities at the end of the year?

• A)$14,600
• B)$26,800
• C)$23,700
• D)$14,300

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Definitions:

Fixed Cost

Costs that do not change with the level of production or output, such as rent or salaries.

Average Fixed Cost

The fixed costs of production (costs that do not change with the level of output) divided by the quantity of output produced.

Average Total Cost

The total cost of production divided by the number of units produced, indicating the average cost per unit.

Average Revenue

The revenue generated per unit of output sold, calculated by dividing total revenue by the number of units sold.