Gains or Losses from Refunding Are Recognized

question 98

Multiple Choice

Gains or losses from refunding are recognized

• A)over the remaining life of the old issue
• B)in the year of refunding
• C)over the life of the new bond issue
• D)as a prior period adjustment

---

Definitions:

Absorption Cost Pricing

A pricing method that includes all manufacturing costs (fixed and variable) in the cost of a product, plus a markup for profit.

Mark-Up Percentage

The percentage added to the cost of goods to cover overhead and profit, determining the selling price of a product.

Variable Manufacturing Cost

Costs that change with the level of production output, such as raw materials and direct labor, contrasted with fixed costs.

Variable Cost Pricing

Setting prices based on the variable costs of producing a product, ignoring fixed costs.