Use the Following Information for Questions
Simson Company Has

question 36

Multiple Choice

Use the following information for questions
Simson Company has 35 employees who work 8-hour days and are paid hourly.On January 1, 2006, the company began a program of granting its employees 10 days of paid vacation each year.Vacation days earned in 2006 may first be taken on January 1, 2007.Information relative to these employees is as follows: $\begin{array}{rrrr}& \text { Hourly } & \text { Vacation Days Earned } &\text { Vacation Days Used}\\\text { Year } & \text { Wages } & \text { by Each Employee }&\text {by Each Emplovee }\\2006 & \$ 25.80 & 10 & 0 \\2007 & 27.00 & 10 & 8 \\2008 & 28.50 & 10 & 10\end{array}$ Simson has chosen to accrue the liability for compensated absences at the current rates of pay in effect when the compensated time is earned.
-What is the amount of expense relative to compensated absences that should be reported on Simson's income statement for 2006?

• A)$0.
• B)$68,880.
• C)$75,600.
• D)$72,240.