Hubbard, Inc

question 31

Multiple Choice

Hubbard, Inc.received the following information from its pension plan trustee concerning the operation of the company's defined-benefit pension plan for the year ended December 31, 2016. The service cost component of pension expense for 2016 is $840,000 and the past service cost due to an increase in benefits is $180,000 effective January 1, 2016.The discount rate is 10%.What is the amount of pension expense for 2016?

• A)$1,800,000
• B)$1,578,000
• C)$1,506,000
• D)$1,380,000

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Definitions:

Materials

The raw items and components used in the production of goods.

Process Costing

An accounting methodology used for homogeneous products, attributing costs to units of product through an average or a similar method.

Conversion Costs

The combined costs of direct labor and manufacturing overhead expenses, representing the costs necessary to convert raw materials into finished goods.

Equivalent Unit

A concept used in cost accounting to convert partially completed goods into a number of complete units of output, allowing for a consistent measure of output.