Swanson and Associates Presently Leases a Copy Machine Under an Agreement

question 38

Multiple Choice

Swanson and Associates presently leases a copy machine under an agreement that calls for a fixed fee each month and a charge for each copy made. Swanson made 7,000 copies and paid a total of $360 in March; in May, the firm paid $280 for 5,000 copies. The company uses the high-low method to analyze costs.
Swanson's variable cost per copy is:

• A) $0.040.
• B) $0.051.
• C) $0.053.
• D) $0.056.
• E) None of the other answers is correct.

---

Definitions:

Receiving Report

a document that records the details of goods received from a supplier, used to match against purchase orders and invoices.

Inventory Control

A system used to oversee and manage the ordering, storage, and use of inventory in a business.

Initial Record

Initial record refers to the first entry of a transaction into the accounting system. This record is crucial for maintaining the accuracy and integrity of financial data.

Perpetual Inventory

An inventory management system that updates item records on a continuous basis as transactions occur, providing real-time inventory levels.