Benjamin Corporation Is a Shipping Container Refurbishment Company That Measures

question 485

Multiple Choice

Benjamin Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. When the company prepared its planning budget at the beginning of March, it assumed that 26 containers would have been refurbished. However, 23 containers were actually refurbished during March.The amount shown for net operating income in the planning budget for March would have been closest to:

• A) ($700)
• B) ($791)
• C) $6,700
• D) ($4,400)

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Definitions:

Common Stock

A type of equity security that represents ownership shares in a corporation, providing voting rights and entitling the holder to a share of the company’s success through dividends and/or capital appreciation.

Treasury Stock

Shares that were once part of the outstanding shares and were bought back by the company.

Preferred Stock

A class of ownership in a corporation with a priority claim on assets and earnings before common stock.

Common Stock

A form of corporate equity ownership, a type of security representing an ownership stake in a corporation.