Calculate the Cost Advantage Index If the Percentage Cost of Goods

question 25

Multiple Choice

Calculate the cost advantage index if the percentage cost of goods sold by the business is 40% and the average percentage cost of goods sold by its top three competitors are 50%,60%,and 70%,respectively.

• A)20
• B)40
• C)57
• D)67
• E)80

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Definitions:

Paid-in Capital

Funds received by a company in exchange for its stock, representing the equity capital contributed by shareholders.

Dividends Payable

A liability account on a company's balance sheet representing the amount of declared dividends that are to be paid out to shareholders.

Date of Declaration

The date on which a company's board of directors announces a dividend payment to shareholders.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares, though the overall market capitalization remains unchanged.