Acer,IncPlans to Develop a Shopping Center

question 5

Multiple Choice

Acer,Inc.plans to develop a shopping center.In the first quarter,the following amounts were spent:

What amount should be recorded as the cost of the land in the corporation's books?

• A)$25,300
• B)$18,300
• C)$20,060
• D)$24,100

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Definitions:

Mixed Cost

A cost composed of a fixed and a variable component and changes in total with the level of activity, but not proportionally.

Variable

An element, feature, or factor that is liable to change or be changed, often used in the context of experiments, statistics, or mathematics.

Mixed Costs

Costs that contain both a variable- and a fixed-cost element and change in total but not proportionately with changes in the activity level.

Fixed Costs

Expenditures such as rent, salaries, and insurance that are unaffected by changes in production or sales volumes.