At the End of Its First Year, the Trading Securities

question 3

Multiple Choice

At the end of its first year, the trading securities portfolio consisted of the following common stocks. In the following year, the Barnes common stock is sold for cash proceeds of $57,000. The gain or loss to be recognized on the sale is a

• A)gain of $1,200.
• B)loss of $3,000.
• C)Loss of $1,000.
• D)loss of $2,000.

---

Definitions:

Direct Labor-Hours

The total hours worked directly on a product by employees.

Plantwide Predetermined Rate

A single overhead absorption rate used throughout an entire factory or plant for allocating overhead costs to products.

Manufacturing Overhead

All indirect costs related to the manufacturing process, including costs of indirect materials, indirect labor, and other expenses that are not directly tied to the production of goods.

Machine-Hours

A measurement unit representing the number of hours a machine is operational and working on production tasks.