What Are Past Service Costs in a Defined Benefit Plan

question 2

Multiple Choice

What are past service costs in a defined benefit plan?

• A)Plan amendments that retrospectively improve pension plan benefits.
• B)Difference arising between the actual and the expected value of plan assets.
• C)Expected interest,dividend or income earned on the pension plan assets.
• D)Differences arising between the actual and expected values of the pension obligations.

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Definitions:

Variable Costs

Costs that vary directly with the level of production or output, such as raw materials and direct labor costs.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been deducted from revenues.

Variable Costs

Expenses that change in proportion to the production or sales figures, like direct labor and raw materials.

Break-Even Point

The level of activity or sales volume at which total revenues equal total costs, resulting in no net loss or gain.