Larry Bar Opened a Frame Shop and Completed These Transactions

question 76

Multiple Choice

Larry Bar opened a frame shop and completed these transactions: 1. Larry started the shop by investing $40,000 cash and equipment valued at $18,000.
2) Purchased $70 of office supplies on credit.
3) Paid $1,200 cash for the receptionist's salary.
4) Sold a custom frame service and collected $1,500 cash on the sale.
5) Completed framing services and billed the client $200.
What was the balance of the cash account after these transactions were posted?

• A)$300.
• B)$41,500.
• C)$40,300.
• D)$38,500.
• E)$38,700.

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Definitions:

Price Variance

The difference between the actual price paid for a good or service and its expected price, often analyzed in budgeting and cost management.

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected for the actual production level, multiplied by the standard labor rate.

Direct Materials

The raw materials that are directly traceable to a finished product and are an integral part of the finished product.

Standard Costs

Predetermined costs for material, labor, and overhead used as benchmarks against which to compare the actual production costs.