Variable cost is the cost which remains constant per unit of output or services. It increases in direct proportion to the level of activity. Fixed cost is the cost which remains constant in totality at each level of activity. Indirect cost is the cost which cannot be directly attributed to the production of specific goods or services such as administrative expenses. Direct cost is the cost which can be directly attributed to the production of specific goods or services. To determine: In the question we have given the cost of holding classes. We have to classify the cost as a) Either variable or fixed b) Either direct or indirect

Question

Want to see the full answer?

Answer 1

Question

Chapter 18, Problem 3E

To determine

Variable cost is the cost which remains constant per unit of output or services. It increases in direct proportion to the level of activity.

Fixed cost is the cost which remains constant in totality at each level of activity.

Indirect cost is the cost which cannot be directly attributed to the production of specific goods or services such as administrative expenses.

Direct cost is the cost which can be directly attributed to the production of specific goods or services.

To determine:

In the question we have given the cost of holding classes.

We have to classify the cost as

a) Either variable or fixed

b) Either direct or indirect

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Expand upon it and add more info

JH, Inc., is a calendar year, accrual basis corporation with Joe as its sole shareholder (basis in his stock is $90,000). On January 1 of the current year, JH Corporation has accumulated E & P of $200,000. Before considering the effect of the distribution described below, the corporation’s current E & P is $50,000. On November 1, JH distributes an office building to Joe. The office building has an adjusted basis of $80,000 (fair market value of $100,000) and is subject to a mortgage of $110,000. Assume that the building has been depreciated using the ADS method for both income tax and E & P purposes. What are the tax consequences of the distribution to JH and to Joe? (In your answer, be sure to describe the effects on taxable income for both JH and Joe, the impact of the distribution on JH’s E & P, and Joe’s basis in the building.)

Joe is the sole shareholder of JH Corporation. Joe sold his stock to Ethan on October 31 for $150,000. Joe’s basis in JH stock was $50,000 at the start of the year. JH distributed land to Joe immediately before the sale. JH’s basis in the land was $20,000 (fair market value of $25,000). On December 31, Ethan received a $75,000 cash distribution from JH. During the year, JH has $20,000 of current E & P and its accumulated E & P balance on January 1 is $10,000. Which of the following statements is true? a. Joe recognizes a $110,000 gain on the sale of his stock. b. Joe recognizes a $100,000 gain on the sale of his stock. c. Ethan receives $5,000 of dividend income.d. Joe receives $20,000 of dividend income. e. None of the above.