What Amount Can Be Paid at the End of Every

question 92

Multiple Choice

What amount can be paid at the end of every month in perpetuity from an endowment of $350,000 which is earning 5.4% compounded monthly?

• A) $1,575
• B) $1,890
• C) $2,100
• D) $15,750
• E) $18,900

---

Definitions:

Standard Cost Systems

Accounting systems that use standards for each element of manufacturing cost entering into the finished product.

Product Costs

The total of direct materials, direct labor, and manufacturing overhead allotted to a product, representing the cost to produce goods.

Volume Variance

The difference between the budgeted fixed overhead at 100% of normal capacity and the standard fixed overhead for the actual production achieved during the period.

Normal Capacity

The average level of operational output that a company can sustain with its current resources, over a specific period and under normal conditions.