The If-Converted Method of Calculating Earnings Per Share Data Assumes

question 24

Multiple Choice

The if-converted method of calculating earnings per share data assumes conversion of convertible securities as of the

• A) beginning of the earliest period reported (or at time of issuance, if later).
• B) beginning of the earliest period reported (regardless of time of issuance).
• C) middle of the earliest period reported (regardless of time of issuance).
• D) ending of the earliest period reported (regardless of time of issuance).

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Definitions:

Variable Overhead

The costs that fluctuate with the level of production output and may include expenses such as utilities and indirect materials.

Direct Materials

Raw materials that can be directly attributed to the manufacturing of a product.

Direct Labor-Hours

Overall hours employees spend directly involved in the fabricating process.

Variable Overhead

Overhead costs that fluctuate with the level of production activity, such as utilities or indirect materials.