The Following Data Has Been Collected About a Company's Stockholders

question 43

Multiple Choice

The following data has been collected about a company's stockholders' equity accounts: $\begin{array}{|l|r|}\hline \text { Common stock } \$ 10 \text { par value } 20,000 \text { shares authorized and } 10,000 \text { shares issued } & \$ 100,000 \\\hline \text { Contributed capital in excess of par value, common stock } & 50,000 \\\hline \text { Retained earnings } & 25,000 \\\hline \text { Treasury stock, } 1,000 \text { shares } & 11,500 \\\hline\end{array}$ The treasury shares were all purchased at the same price. The cost per share of the treasury stock is:

• A) $1.15
• B) $1.28
• C) $11.50
• D) $10.50
• E) $10.00

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Definitions:

Variable Costing

An accounting method that considers only variable production costs (costs that change with the level of output) in the calculation of product costs.

Unit Product Cost

The total cost associated with producing one unit of a product, including both variable and fixed costs.

Variable Costing

An accounting method that includes only variable production costs (direct labor, direct materials, and variable manufacturing overhead) in product costs.

Cost-Volume-Profit Analysis

An accounting technique used to determine how changes in costs and sales volume affect a company's operating income and net income.