Which of the Following Costs Is NOT Covered in an Accounting

question 16

Multiple Choice

Which of the following costs is NOT covered in an accounting break-even analysis?

• A) Shareholders expected rate of return
• B) Variable production costs
• C) Interest expense
• D) Depreciation expense

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Definitions:

Semiannual Interest

Interest on a loan or investment calculated and paid twice a year, typically at a fixed rate.

Parent Company

A parent company is a corporation that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors.

Subsidiary Company

A subsidiary company is one that is controlled by another company, typically referred to as the parent company, through ownership of more than half of the subsidiary’s voting stock.

Equity Method

This accounting technique is used for consolidating the financial statements of a company in which the investing company holds significant influence, but not full control or majority ownership.