Finch Company Began Its Operations on March 31 of the Current

question 172

Multiple Choice

Finch Company began its operations on March 31 of the current year. Finch Co. has the following projected costs: (1) 3/4 of the manufacturing costs are paid for in the month they are incurred. 1/4 is paid in the following month.
(2) Insurance expense is $1,000 a month, however, the insurance is paid four times yearly in the first month of the quarter, i.e. January, April, July, and October.
(3) Property tax is paid once a year in November.
The cash payments for Finch Company in the month of April are:

• A) $122,600
• B) $120,600
• C) $123,100
• D) $121,100

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Definitions:

Profit-Sharing Plan

A company program that offers employees a share in the profits of the business, typically as a form of incentive or bonus.

Merit Pay Plan

A compensation strategy where employees are paid based on their performance or achievements, often intended to motivate and reward excellence.

Gain-Sharing Plan

A compensation strategy where employees receive financial benefits from improvements in the company's performance, encouraging productivity and team effort.

Skill-Based Pay

A compensation system that determines salaries based on the skills or knowledge an employee possesses, rather than their job position or title.