Assume the Costs of a Service Department Are Driven by the Number

question 61

True/False

Assume the costs of a service department are driven by the number of service orders and the equation for calculating the costs of a service department is y = $5000 + $3x. The cost of the department if there were 6000 orders would be $25 000.

---

Definitions:

Straight-Line Method

A method of calculating depreciation and amortization that evenly distributes the cost of an asset over its useful life.

Market Rate

Market Rate is the prevailing interest rate available in the marketplace on loans, savings, or investments.

Coupon Rate

The annual interest rate paid by a bond's issuer to the bond's holders, usually expressed as a percentage of the bond's face value.

Interest Expense

The cost incurred by an entity for borrowed funds, which may pertain to bonds, loans, lines of credit, or other forms of debt financing.