A Business Operated at 100% of Capacity During Its First

question 17

Multiple Choice

A business operated at 100% of capacity during its first month, with the following results: What is the amount of the contribution margin that would be reported on the variable costing income statement?

• A) $34,200
• B) $20,200
• C) $29,700
• D) $26,200

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Definitions:

Beginning Equity

The value of an owner's interest in a company at the start of an accounting period, before any transactions affecting equity occur.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Dividends

Disbursements from a corporation to individuals holding its stock, serving as their share of the earnings.

Ending Equity

The value of an owner's interest in a property or a business at the end of an accounting period after all debts have been subtracted.