On 1 January 2014, Davie Services Issued $20 000 of 8

question 49

Multiple Choice

On 1 January 2014, Davie Services issued $20 000 of 8% debentures that mature in five years. They were sold at par. The debentures pay half- yearly interest payments on 30 June and 31 December of each year. On 30 June 2014, how much are the total interest payments made to debenture holders?

• A)$800.00
• B)$133.33
• C)$1 600.00
• D)$160.00

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Definitions:

Mixed Cost

Expenses that have both fixed and variable components, changing in total with the level of activity but not proportionately.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including indirect labor, materials, and factory-related expenses.

Raw Materials

Basic substances in their natural, modified, or semi-processed state, used as inputs for manufacturing finished goods.

Unit Level Cost

Costs that are incurred for every unit of production, such as direct materials and direct labor.