Which Is the Correct Entry to Record Compensation Expense for the Year

question 66

Short Answer

Which is the correct entry to record compensation expense for the year 2016?

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Definitions:

Variable Costs

Expenses that fluctuate directly with the volume of production or sales, such as raw materials and direct labor costs.

Fixed Costs

Constant expenditures that do not change with the volume of production or sales, such as rent or salaries.

Contribution Margin Ratio

A measure expressing how a product's selling price exceeds variable costs, shown as a percentage of the sales price.

Fixed Expenses

Costs that do not vary with the volume of production or sales, such as rent, salaries, and insurance.