Fiona and Jason Have Capital Balances of $40 000 and $80

question 61

Multiple Choice

Fiona and Jason have capital balances of $40 000 and $80 000 respectively and use the variable capital balances method. If their profit/loss sharing ratios are Fiona 25% and Jason 75%, the balance of Fiona's capital account after a net loss of $50 000 is:

• A) $23 333
• B) $27 500
• C) $10 000
• D) $52 500

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Definitions:

Variable Overhead

Costs that fluctuate with production volume, such as utilities or materials used in production.

Direct Labour Hours

are the hours worked by employees directly involved in the production of goods and services.

Standard Quantity

The predetermined or estimated amount of materials or inputs needed to produce a single unit of output.

Direct Materials

Basic substances that can be directly linked to the production of a particular item.