Use the Following Information to Answer the Next 4 Questions

question 75

Multiple Choice

Use the following information to answer the next 4 questions:
Discount-Mart issues $10 million in bonds on January 1,2015.The bonds have a ten-year term and pay interest semiannually on June 30 and December 31 each year.Below is a partial bond amortization schedule for the bonds:

-What is the interest expense on the bonds in 2015?

• A)$693,103.
• B)$600,000.
• C)$345,639.
• D)$347,464.

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Definitions:

Direct Labor

The wages and other costs for labor that are directly involved in the manufacturing of a product or the provision of a service.

Raw Material

The basic material from which a product is made, typically processed and used in the manufacturing process.

Materials Price Variance

The difference between the actual cost of raw materials and the expected (standard) cost, used in budgeting and financial analysis to gauge purchasing efficiency.

Direct Materials

Raw materials that are directly used in the manufacturing of a product and are easily traceable to the final product.