A Corporation Has 2 000 Shares of $50 Par, 10

question 66

Multiple Choice

A corporation has 2 000 shares of $50 par, 10% preference shares, and 6 000 ordinary shares outstanding. The profit for the year is $25 0000. The earnings per share of ordinary shares would be:

• A)$31.25.
• B)$10.83.
• C)$40.00.
• D)$41.67.

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Definitions:

Underapplied Overhead

A situation where the allocated overhead cost is less than the actual overhead incurred, leading to a discrepancy in accounting records.

Cost of Goods Sold

The expenses directly related to the manufacturing of goods a company sells.

Overapplied

Refers to a condition where the amount of costs allocated or applied to goods or services exceeds the actual costs incurred.

Manufacturing Overhead

All manufacturing costs that are not directly tied to a specific product or production activity, including utilities, rent, and salaries for supervisors.