Rounded to the Nearest Month, How Long Will It Take

question 266

Multiple Choice

Rounded to the nearest month, how long will it take for $25,000 to grow to $35,000 at 9% compounded quarterly?

• A) 3 years, 8 months
• B) 5 years, 1 month
• C) 4 years, 4 months
• D) 5 years, 6 months
• E) 3 years, 1 month

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs – direct materials, direct labor, and both variable and fixed manufacturing overhead – in the cost of a product.

Variable Costing

An accounting method that includes only variable costs—costs that vary with production level—in the calculation of unit cost.

Net Incomes

The total earnings of a company after all expenses and taxes have been deducted from total revenue.

Variable Costing

A pricing strategy that incorporates solely the variable costs associated with production—such as direct materials, direct labor, and variable manufacturing overhead—into the cost of goods sold, while omitting fixed overhead expenses.