Simon Corp's $1 Par Value, Common Stock Was Selling for $20

question 13

Multiple Choice

Simon Corp's $1 par value, common stock was selling for $20 per share. Simon Corp's owners' equity accounts were as follows: How many shares of common stock are outstanding?

• A) 30,000
• B) 600,000
• C) 800,000
• D) Not enough information to determine.

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Definitions:

Product Cost Concept

A concept used in applying the cost-plus approach to product pricing in which only the costs of manufacturing the product, termed the product cost, are included in the cost amount to which the markup is added.

Manufacturing Costs

Manufacturing costs encompass all expenses directly involved in the production of goods, including materials, labor, and overhead.

Markup

The difference between the cost of a product and its selling price, expressed as a percentage over cost.

Fixed Expenses

Regular and unchanged expenses incurred by a business irrespective of its level of output or sales volume, such as lease payments, insurance, and salaries of permanent employees.