Aaron Purchased 200 Shares of a Technology Stock for $14

question 4

Multiple Choice

Aaron purchased 200 shares of a technology stock for $14.80 a share. The initial margin requirement on this stock is 85 percent and the maintenance margin is 60 percent. What is the lowest the stock price can go before he receives a margin call?

• A) $4.43
• B) $5.55
• C) $6.02
• D) $8.33
• E) $10.03

---

Definitions:

Conversion Costs

The combined costs of direct labor and manufacturing overhead, which are incurred to convert raw materials into finished products.

Equivalent Units

A method used in process costing that converts partially completed units into a smaller number of fully completed units.

Manufacturing Costs

The total expenses involved in the process of producing or manufacturing goods, including raw materials, labor, and overhead costs.

Conversion Costs

Expenses related to transforming raw materials into finished goods, typically including labor costs and manufacturing overhead.