Ramon's Has 21,000 Shares of Stock Outstanding with a Par

question 302

Multiple Choice

Ramon's has 21,000 shares of stock outstanding with a par value of $1.00 per share and a market price of $27 a share. The firm just announced a 5-for-3 stock split. How many shares of stock will be outstanding after the split?

• A) 12,600 shares
• B) 21,000 shares
• C) 27,000 shares
• D) 35,000 shares
• E) 42,400 shares

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Definitions:

Standard Direct Materials

The budgeted cost for direct materials which are the raw materials that can be directly attributed to the production of goods, used for budgeting and performance evaluation.

Actual Materials Price

The real cost incurred to acquire materials used in the production process, as opposed to the budgeted or standard cost.

Standard Price

A predetermined cost assigned to materials, used for budgeting and variance analysis.

Standard Direct Materials

The predetermined cost and quantity of raw materials required for the production of a unit of product under normal conditions.