What Is the Amount of Sales Commissions Payable That the Company

question 76

Multiple Choice

What is the amount of sales commissions payable that the company will report on its pro forma balance sheet at the end of the fourth quarter?

• A) $5,500
• B) $5,000
• C) $5,300
• D) $11,000

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Definitions:

Variable Costing

An accounting method that only assigns variable costs to inventory, treating fixed costs as expenses in the period they are incurred.

Variable Costing

An accounting practice that only factors in variable production expenses (like direct materials, direct labor, and variable manufacturing overhead) into the cost of goods.

Unit Product Cost

The total cost (including materials, labor, and overhead) divided by the number of units produced, representing the cost to produce a single unit of product.

Variable Costing

A costing method that includes only variable costs—direct materials, direct labor, and variable manufacturing overhead—in product cost calculation, excluding fixed overhead.