Market Value Ratios Fancy Paws' Year-End Price on Its Common

question 59

Multiple Choice

Market Value Ratios Fancy Paws' year-end price on its common stock is $20.The firm has total assets of $40 million,the debt ratio is 40 percent,there is no preferred stock,and there are 2 million shares of common stock outstanding.Calculate the market-to-book ratio for Fancy Paws.

• A)0.47
• B)1.67
• C)8.00
• D)10.00

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Definitions:

Actual Costs

The true expenses incurred in the production of a product or the provision of a service, as opposed to estimated or budgeted costs.

Material Variance

Material variance is the difference between the actual cost of materials used in the production process and the expected (or standard) cost, used to analyze and control costs in manufacturing.

Standard Cost

Standard cost is an estimated or predetermined cost of performing an operation, producing a good, or delivering a service, under normal conditions, used for budgeting and assessing performance.

Materials Price Variance

The difference between the actual cost and the standard cost of materials multiplied by the quantity purchased.