You Purchased 500 Shares of SLG, Inc

question 79

Multiple Choice

You purchased 500 shares of SLG, Inc., stock at a price of $43.70 a share. You then purchased put options on your shares with a strike price of $40.00 and an option premium of $.90. At expiration, the stock was selling for $47.80 a share. You sold your shares on the option expiration date. What is your net profit or loss on your transactions related to SLG, Inc., stock?

• A)$1,650
• B)$1,250
• C)$1,600
• D)$2,150
• E)$2,300

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Definitions:

Standard Prices

Predetermined prices used in budgeting and cost control procedures for valuing transactions and measuring cost variances.

Direct Materials Quantity Variances

The variance that occurs when the actual quantity of materials used in production differs from the expected quantity.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

ABC

A method of identifying and assigning costs to specific activities to improve cost accuracy and managerial decision-making.