Presented Below Is Information Related to Decker Manufacturing Company as of December

question 58

Multiple Choice

Presented below is information related to Decker Manufacturing Company as of December 31, 2011:

The amount for the past service cost is related to an increase in benefits.The fair value of the pension plan assets is $600,000.
The pension asset \ liability reported on the statement of financial position at December 31, 2011 is

• A)Pension liability of $300,000
• B)Pension liability of $600,000
• C)Pension liability of $900,000
• D)Pension liability of $1,305,000

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Definitions:

Variable Factory Overhead Controllable Variance

The difference between the actual variable overhead costs incurred and the standard variable overhead expenses expected, which can be controlled or influenced by management.

Standard Factory Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production, based on a certain base such as labor hours or machine hours.

Direct Labor Hour

A measure of the amount of time an employee spends producing goods or services, directly associated with the product's cost.

Normal Capacity

Represents the average production level expected over a specific period under normal operating conditions.