The 12/31/2018 Balance Sheet of Despot Inc

question 147

Multiple Choice

The 12/31/2018 balance sheet of Despot Inc. included the following: In January 2018, Despot recorded a transaction with this journal entry:
- The transaction was for the:

• A) Issue of 2 million shares of common stock at par.
• B) Issue of common stock for $150 million in cash.
• C) Receipt of $20 per share for a new stock issue.
• D) All of these answer choices are correct.

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Definitions:

Actual Overhead

The real, incurred costs of running a production or service operation, excluding direct labor and direct materials.

Activity-Based Costing

A pricing strategy that pinpoints various tasks within a company and allocates the expenses of each task to every product and service based on their specific usage.

Overhead Rate

A calculation used to allocate indirect costs to produced goods or services, often based on labor hours, machine hours, or direct labor costs.

Cost of Services Account

An accounting category that includes all direct costs associated with the delivery of services, such as labor and materials.