The Amortization of a Net Gain Has What Effect on Pension

question 200

Multiple Choice

The amortization of a net gain has what effect on pension expense?

• A) Decreases it.
• B) Has no effect on it.
• C) Increases it (but only by the amount over 10% of the PBO).
• D) Increases it (regardless of the amount).

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Definitions:

Unit Product Cost

Unit product cost is the total cost to produce one unit of product, calculated by dividing total production costs by the number of units produced.

Direct Labor Cost

The total amount of money a company spends on wages for employees who are directly involved in the manufacturing of products or providing services.

Absorption Costing

An accounting method that includes both variable and fixed manufacturing costs in the cost of a product.

Net Operating Income

The profit realized from a business's operations after subtracting operating expenses but before deducting taxes and interest.