Gordon and Lisa Estimate That They Will Need $1,875,000 in 40

question 44

Multiple Choice

Gordon and Lisa estimate that they will need $1,875,000 in 40 years for their retirement fund.If they can earn 8 percent annually on their funds,how much do they need to save annually? (Round off to the nearest units place.)

• A)$7,238
• B)$7,987
• C)$8,103
• D)$9,234
• E)$9,875

---

Definitions:

Inventory

The raw materials, work-in-progress, and finished goods that a company holds for the purpose of sale in the future.

Absorption Costing

A method of accounting that encompasses all costs associated with manufacturing a product, including direct materials, direct labor, and all manufacturing overhead costs, both fixed and variable.

Variable Costing

A costing method where only variable costs (costs that change with production volume) are included in the product cost, excluding fixed costs.

Fixed Manufacturing Overhead

Costs that remain constant regardless of the level of production, such as rent, utility bills, and salaries for certain employees.