Wolfe Inc Wolfe Inc

question 65

Multiple Choice

Wolfe Inc. Wolfe Inc.reports these account balances at January 1,2014:
See the account balances for Wolfe Inc.
On January 31,Wolfe collected $12,000 of its accounts receivable and paid $11,000 on its note payable.On January 31,2014,the total liabilities are:

• A)$0
• B)$56,000
• C)$41,000
• D)$30,000

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Definitions:

Cost Behavior Classifications

The categorization of costs based on how they change in relation to changes in a company’s level of activity or volume.

Activity Base

A measure upon which the allocation of costs is based in activity-based costing, often relating to a metric that causes costs to occur such as machine hours or labor hours.

Cost Behavior

The way in which costs change in relation to variations in an organization’s activity level.

Variable Costs

Costs that change in proportion to the level of production or sales, such as raw materials and direct labor.