Bankston Corporation Forecasts That If All of Its Existing Financial

question 60

Multiple Choice

Bankston Corporation forecasts that if all of its existing financial policies are followed,its proposed capital budget would be so large that it would have to issue new common stock.Since new stock has a higher cost than retained earnings,Bankston would like to avoid issuing new stock.Which of the following actions would REDUCE its need to issue new common stock?

• A) Increase the dividend payout ratio for the upcoming year.
• B) Increase the percentage of debt in the target capital structure.
• C) Increase the proposed capital budget.
• D) Reduce the amount of short-term bank debt in order to increase the current ratio.
• E) Reduce the percentage of debt in the target capital structure.

Distinguish between variable, fixed, and total factory overhead variances.

Apply concepts of factory overhead variances to real data, including fixed overhead volume and controllable variances.

Analyze the impact of external factors on standard cost variances.

Comprehend the formulae and calculation methods for standard cost variances.

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Definitions:

Delivery Service

A service that transports goods from the point of purchase directly to the recipient's location.

Stranded

Left isolated or in a difficult situation without the means to move or act.

Utilities

Essential services provided to the public, including electricity, gas, water, and telecommunications.

Retailing

The selling of goods and services to consumers for personal or household use.