With respect to Ralph, what is the service cost to be included in Oregon's 2013 postretirement benefit expense, rounded to the nearest dollar?

Question

Quizplus · Accepted Answer

The service cost is the present value of the projected benefit payments attributed by the pension benefit formula to employee service in the current period. In this case, Ralph's service cost is calculated as: 1.5% x $317,500 x (1 - 6/20) = $5,271.88. Rounded to the nearest dollar, the service cost to be included in Oregon's 2013 postretirement benefit expense is $5,272. Therefore, the correct option is D.

With Respect to Ralph, What Is the Service Cost to Be