Mega Computer Issued Stock with a Face Value of One

question 118

Multiple Choice

Mega Computer issued stock with a face value of one cent and then sold the shares to the public for $20.00 each. Ted bought 10 shares at that price. Today, Ted sold his shares to David for $25.00 each. What are Ted's capital gains?

• A) $19.99
• B) $20.00
• C) $25.00
• D) $50.00
• E) $0.01

---

Definitions:

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on their usage of the resources.

Materials Handling

The movement, protection, storage, and control of materials and products throughout manufacturing, warehousing, distribution, and disposal processes.

Estimated Manufacturing Overhead

The forecasted indirect costs associated with the production process, not directly tied to specific units.

Machine-Related

Machine-related refers to costs, activities, or operations directly associated with the machinery used in production or manufacturing processes.