A Company Is Not Required to Consolidate a Subsidiary in Which

question 53

Multiple Choice

A company is not required to consolidate a subsidiary in which it holds more than 50% of the voting stock when

• A)the subsidiary is located in a foreign country.
• B)the subsidiary in question is a finance subsidiary.
• C)the company holds more than 50% but less than 60% of the subsidiary's voting stock.
• D)the company holds less than 75% of the subsidiary's voting stock.
• E)the subsidiary is in bankruptcy.

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Definitions:

Job-order Costing

A costing method used to track costs specifically associated with a given job or project, allowing for detailed monitoring of expenses.

Predetermined Overhead Rate

A calculated rate used to charge overhead costs to products or job orders, determined by dividing estimated overhead costs by an allocation base.

Manufacturing Overhead

All indirect costs associated with the production process, like maintenance, utilities, and quality control.

Predetermined Overhead Rate

An estimated overhead rate used to allocate manufacturing overhead costs to products, calculated prior to the accounting period.