Question

Pearsall Company's defined benefit pension plan had a PBO of $272,000 on January 1, 2021. During 2021, pension benefits paid were $41,000. The discount rate for the plan for this year was 10%. Service cost for 2021 was $86,000. Plan assets (fair value) increased during the year by $53,000. The amount of the PBO at December 31, 2021, was: $231,000. $385,200. $344,200. None of these answer choices are correct.

A 401k plan:

is a type of defined contribution pension plan.

is a type of defined benefit pension plan.

creates a liability for the employer.

creates a liability for the employee.

Data concerning three of the activity cost pools of Salcido LLC, a legal firm, have been provided below:

Activity Cost Pool	Total Cost		Total Activity
Researching legal issues	$	20,930	670	research hours
Meeting with clients	$	1,184,706	7,313	meeting hours
Preparing documents	$	92,290	5,770	documents

The activity rate for the “meeting with clients” activity cost pool is closest to:

• $91 per meeting hour

• $71 per meeting hour

• $162 per meeting hour

• $1,184,706 per meeting hour

Deemer Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow:

Overhead costs:
Equipment expense	$	49,000
Indirect labor	$	11,600

Distribution of Resource Consumption Across Activity Cost Pools:

	Activity Cost Pools
	Processing	Supervising		Other
Equipment expense	0.50	0.40		0.10
Indirect labor	0.50	0.40		0.10

Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:

Activity:

	MHs (Processing)	Batches (Supervising)
Product F6	9,600	580
Product X0	1,500	520
Total	11,100	1,100

The activity rate for the Supervising activity cost pool under activity-based costing is closest to:

• $17.34 per batch

• $8.67 per batch

• $55.09 per batch

• $22.04 per batch

Answer 1