Neon Blue Co ​
the Earnings for the Current Year Were $325,000

question 76

Essay

Neon Blue Co.provided the following summarized balance sheet as of the end of the current year.
​​ $$\begin{array} { | l | r | } \hline \text { Common Stock, } \$ 10 & \$ 6,500,000 \\\hline \text { Paid-In Capital in Excess of Par-Common Stock } & 950,000 \\\hline \text { Retained Earnings } & 850,000 \\\hline\end{array}$$ ​
The earnings for the current year were $325,000.Compute the earnings per share of common stock.

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard cost allocated for the actual level of activity.

Unfavorable

A term used in budgeting and variance analysis to describe a situation where actual costs are higher than expected or budgeted costs.

Favorable

A term used in accounting and finance to describe a situation or variance that results in a better-than-expected financial outcome.

Standard Cost System

A method of cost accounting in which predetermined costs are used for valuing inventory and recording operations, facilitating variance analysis.