Siva Operates a Retail Music Store as a Sole Proprietorship

question 137

Multiple Choice

Siva operates a retail music store as a sole proprietorship.Which of the following items are capital assets in the hands of Siva?

• A)The store's counters and display cases.
• B)A portable music player that has been in the store's inventory for over a year.
• C)The store building that is an asset of the sole proprietorship.
• D)An interest-bearing savings account used to keep the store's excess cash.
• E)None of the above.

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Definitions:

Bottlenecks

Refer to points of congestion in a production system that significantly slow down the overall process.

Variable Cost Concept

A concept used in applying the cost-plus approach to product pricing in which only the variable costs are included in the cost amount to which the markup is added.

Fixed Manufacturing Costs

Expenses related to the production process that do not vary with the volume of production, such as salaries of supervisors and rent of the factory.

Markup

The amount added to the cost of goods to cover expenses and generate profit.