Based on the Following Information Calculate the Times Interest Earned

question 113

Multiple Choice

Based on the following information calculate the times interest earned of the company. $$\begin{array} { | l | r } \hline\text { Total Assets } & \mathbf { \$ 3 0 7 , 5 0 0 } \\\hline \text { Total liabilities } & 142,500 \\\hline \text { Total stockholder's Equity } & 165,000 \\\hline \text { Net income } & 97,500 \\\hline \text { Income tax expense } & 6,000 \\\hline \text { Interest expense } & 750 \\\hline\end{array}$$

• A)122
• B)129
• C)130
• D)139

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Definitions:

Unit Product Cost

The total cost incurred to produce, purchase, or manufacture one unit of a product, including direct material, direct labor, and manufacturing overhead.

Variable Costing

A financial recording technique that factors in only direct materials, direct labor, and variable manufacturing overhead as part of the product's costing.

Total Gross Margin

The total amount of revenue a company retains after incurring the direct costs associated with producing the goods it sells and the services it provides.

Unit Product Cost

The total expense incurred to produce, manufacture, or acquire a product divided by the number of units.