Assume Total Fixed Costs of $160,000,variable Costs Per

question 125

Multiple Choice

Assume total fixed costs of $160,000,variable costs per

• A)5,000 units
• B)25,000 units
• C)40,000 units
• D)52,500

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Definitions:

Effective-Interest Method

A way of calculating the amortized cost of a bond and of allocating interest expense over the bond's life, reflecting the actual interest rate earned.

Discount on Bonds Payable

The difference between the face value of a bond and its selling price, when sold for less than its face value.

Amortization

The process of spreading out a loan or intangible asset cost over a specific period of time for accounting and taxation purposes.