Mario's Has 18,000 Shares of Stock Outstanding with a Par

question 162

Multiple Choice

Mario's has 18,000 shares of stock outstanding with a par value of $1.00 per share and a market price of $33 a share. The firm just announced a 5-for-3 stock split. What will the par value of the stock be after the split?

• A) $0.40
• B) $0.60
• C) $1.00
• D) $1.30
• E) $1.50

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Definitions:

Factory Overhead

All indirect costs associated with manufacturing, excluding direct labor and materials, like utilities and equipment depreciation.

Accounting Period

A specific period of time used by businesses for accounting purposes, often a fiscal year or quarter, to report financial performance.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products based on a predetermined formula.

Estimated Overhead Cost

Estimated overhead cost refers to the projected expenses related to manufacturing overhead or indirect costs that are expected to be incurred over a specified period.