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.

Understand the concept of relevant costs for decision-making and identify relevant versus irrelevant costs.

Explain the importance of incremental costs and benefits in decision-making processes.

Analyze the financial impact of make or buy, and sell or process further decisions.

Calculate the minimum acceptable price for selling or purchasing products based on relevant costs.