The Term 2/10 Net 30 Means

question 40

Multiple Choice

The term 2/10 net 30 means:

• A)If the invoice is paid within 10 days,a 2% discount can be taken.If the invoice is paid between 11 and 29 days a 1% discount can be taken.After 30 days the full invoice is due.
• B)If the invoice is paid within 2 days,a 10% discount can be taken,otherwise the full invoice is due in 30 days.
• C)If the invoice is paid within 2 days,a 10% discount can be taken,otherwise a 2% discount can be taken if the invoice is paid in 30 days.
• D)If the invoice is paid within 10 days,a 2% discount can be taken,otherwise the full invoice is due in 30 days.

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Definitions:

Plantwide Predetermined

A uniform overhead rate used across an entire plant or factory, calculated by dividing estimated overhead costs by an estimated allocation base like labor hours or machine hours.

Machine-Hours

An operating measure that quantifies the amount of time production equipment is utilized in the manufacture of goods.

Predetermined Overhead Rate

A rate calculated before a production period based on estimated overhead costs and estimated activity, used to allocate overhead costs to products.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead to individual products or projects, based on expected conditions.