The EPBO for a Particular Employee on January 1, 2009

question 147

Multiple Choice

The EPBO for a particular employee on January 1, 2009, was $30,000. The APBO at the beginning of the year was $6,000. The appropriate discount rate for this postretirement plan is 5%. The employee is expected to serve the company for a total of twenty-five years with five of those years already served as of January 1, 2009. What is the APBO at December 31, 2009?

• A)$6,300.
• B)$7,200
• C)$7,500.
• D)$7,560.($30,000 1.05) 6/25 = $7,560

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Definitions:

ABC System

Activity-Based Costing (ABC) System is a method of allocating costs to products and services based on the activities that go into producing them.

Departmental Managers

Individuals responsible for overseeing specific departments within a company, focusing on performance, objectives, and management of departmental employees.

Non-Personnel Costs

includes expenses related to the operation of a business that are not associated with employee compensation, such as materials, utilities, and rent.

Activity Cost Pools

A grouping of all the costs related to a particular activity or process, used in activity-based costing to allocate costs more accurately to products or services.