Dynamic Corporation Had the Following Data Regarding Monthly Power Costs

question 174

Multiple Choice

Dynamic Corporation had the following data regarding monthly power costs: Assume that management expects 500 machine hours in May. Using the high-low method, calculate May's power cost using machine hours as the basis for prediction.

• A) $700
• B) $705
• C) $710
• D) $1,320

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Definitions:

Bondholders

Individuals or institutions that hold the debt securities issued by corporations or governmental entities.

Discount on Bonds Payable

The difference between the par value of a bond and its lower selling price, recognized as an expense over the life of the bond.

Contract Rate

The agreed-upon interest rate specified in a loan or bond contract.

Market Rate

The prevailing rate of interest for loans or investments within a specific market sector.