Mouns Company Owns 30\% Interest in the Shares of Darian $\$ 20,000$

question 68

Multiple Choice

Mouns Company owns 30\% interest in the shares of Darian Corporation. During the year, Darian pays $\$ 20,000$ in dividends to Mouns, and reports $\$ 100,000$ in net income. Mouns Company's investment in Darian will increase Mouns' net income by

• A)$ 15,000 .
• B)$ 30,000 .
• C)$ 24,000 .
• D) 6,000 .

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Definitions:

Supplies Inventory

Items held in stock by a business, such as office supplies or maintenance materials, not directly used in manufacturing but necessary for operations.

Factory Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor.

Direct Labor Hours

The total hours of labor spent by workers who are directly involved in the manufacturing process of a product.

Overapplied Manufacturing Overhead

Occurs when the allocated amount for manufacturing overhead costs exceeds the actual overhead costs incurred.