Blue Ice Inc

question 69

Essay

Blue Ice Inc.compensates its employees for certain absences.Employees can receive one day vacation plus one day sick leave for each month worked during the year.Unused vacation days may be carried forward,but unused sick leave expires within the year of employment.Employees are compensated according to their current pay rate.The following data were taken from the records for the year 2014.

Compute the amount that should be reported as a liability for compensated absences on December 31,2014.

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Definitions:

Personnel Expenses

Costs related to the compensation and benefits of a company's employees.

Budgeting

A process of creating a plan to spend your money, allowing you to determine in advance whether you will have enough money to do the things you need or want to do.

Activity Variance

The difference between the expected cost of an activity and its actual cost, often used in budgeting and cost management to analyze performance.

Administrative Expenses

Costs associated with the general operation of a company, which do not directly relate to the production or selling of goods or services.