Calculate Payout Ratio Given the Following Information: Cash Dividends Paid

question 118

Multiple Choice

Calculate payout ratio given the following information: cash dividends paid = $19,950; sales = $250,000; cost of goods sold = $100,000; selling and administrative expenses = $50,000; interest
Expense = $5,000; tax rate= 30%.

• A) 70%
• B) 30%
• C) 50%
• D) 35%
• E) 65%

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Definitions:

Conversion Cost

The sum of direct labor costs and manufacturing overhead costs, representing the expenses necessary to convert raw materials into finished goods.

Equivalent Unit

A concept used in cost accounting to represent a partially finished unit in terms of a full finished unit.

Process Costing

A costing method used in manufacturing where costs are assigned to batches or process levels, suitable for homogeneous products.

Service Provider

A company or individual that offers specific professional services or products to customers or businesses.