Jambon Company Owns 10% Interest in the Stock of Fanth

question 57

Multiple Choice

Jambon Company owns 10% interest in the stock of Fanth Corporation. During the year, Fanth pays $12,000 in dividends to Jambon, and reports $200,000 in net income. Jambon Company's investment in Fanth will increase Jambon net income by

• A) $20,000.
• B) $19,200.
• C) $12,000.
• D) $8,000.

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Definitions:

Unused Capacity

The available but unutilized production or service capacity of a business, often reflecting inefficiencies or missed revenue opportunities.

Time-Driven

Pertaining to methods or systems where actions are scheduled or measured based on time.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing more accurate information on the real cost of specific product lines, services, or customers.

Number Of Employees

The total count of individuals employed by a company or organization, regardless of their employment status (full-time, part-time, etc.).