The Following Information Is Available for Longview Company: as a Result

question 2

Multiple Choice

The following information is available for Longview Company: As a result of a review and aging of accounts receivable,it has been determined that the Allowance for Doubtful Accounts should show a balance of $2,400 at December 31,2014.What amount should Longview record as bad debt expense for the year ended December 31,2014?

• A) $2,500
• B) $1,300
• C) $2,400
• D) $3,700

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Definitions:

Production Capacity

The maximum output that a business can produce in a given period under normal working conditions.

Fixed Manufacturing Overhead

Costs associated with manufacturing that do not vary with the level of production, such as rent, salaries, and insurance.

Variable Cost

Costs that change in proportion to the level of production or sales volume.

Outside Supplier

A third-party entity that provides goods or services to a company, typically not affiliated with the company's internal supply chain.