Use the information in Table 10.1. Which one of these trade-offs works to your greatest advantage in terms of reducing costs over the entire planning period?
A) Produce units using part-time workers instead of regular-time workers.
B) Begin with a larger anticipation inventory to avoid backorders completely.
C) Use no overtime, subcontracting, or part time in favor of a level regular-capacity plan.
D) Begin the planning period with 570 units of anticipation inventory and produce nothing in the planning period.
B
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On January 1, Year 1, Stratton Company borrowed $180,000 on a 10-year, 8% installment note payable. The terms of the note require Stratton to pay 10 equal payments of $26,825 each December 31 for 10 years. The required general journal entry to record the payment on the note on December 31, Year 2 is:
A. Debit Notes Payable $14,400; debit Interest Expense $12,425; credit Cash $26,825. B. Debit Interest Expense $14,400; debit Notes Payable $12,425; credit Cash $26,825. C. Debit Interest Expense $13,406; debit Notes Payable $13,419; credit Cash $26,825. D. Debit Notes Payable $26,825; credit Cash $26,825. E. Debit Notes Payable $180,000; debit Interest Expense $8825; credit Cash $26,825.
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