Use the Following Information for Questions 110 and 111

question 132

Multiple Choice

Use the following information for questions 110 and 111.
Vanco Company has 35 employees who work 8-hour days and are paid hourly. On January 1, 2013, the company began a program of granting its employees 10 days of paid vacation each year. Vacation days earned in 2013 may first be taken on January 1, 2014. Information relative to these employees is as follows: Vanco 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 Vanco's income statement for 2013?

• A) $0.
• B) $71,400.
• C) $63,000.
• D) $57,400.

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Definitions:

Lost Contribution Margin

The amount of contribution margin that is not realized due to not selling a product or service, often calculated as the sales price minus variable costs for the unsold units.

Commercial Security Division

A branch within a corporation focused on providing security services and solutions to businesses and commercial properties.

Valve Division

A specific segment or department within a company that focuses on the manufacturing and sale of valves; this term could also relate to an organizational unit in a business.

Idle Capacity

The unused portion of a company's production or service capacity, where resources are available but not being fully utilized.