Figure 6-3 Bill Berry, CPA, prepares tax returns.The production costs and the number of tax returns prepared for the month of August are as follows:
Number of tax returns 200
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Refer to Figure 6-3.What is the cost of services sold?

Question

Figure 6-3 Bill Berry, CPA, prepares tax returns.The production costs and the number of tax returns prepared for the month of August are as follows:
 Number of tax returns 200
-
Refer to Figure 6-3.What is the cost of services sold?

Quizplus · Accepted Answer

Cost of services sold is the production cost incurred in providing the service to customers. In this case, the production cost is $3,000, as given in the chart, and the number of tax returns prepared is 200. Therefore, the cost of services sold is $3,000 divided by 200, which equals $15 per tax return. Multiplying this by the number of tax returns prepared, we get $3,000, which is the cost of services sold. Thus, the correct answer is option A, $3,000.

Figure 6-3 Bill Berry, CPA, Prepares Tax Returns