A Shareholder in Company C Owns 2,000 Shares Bought for $1

question 7

Multiple Choice

A shareholder in Company C owns 2,000 shares bought for $1 each. The company decides to make a bonus issue of one new share for every two existing shares held. How many shares does the shareholder now have in Company C?

• A)3,000 shares.
• B)1,500 shares.
• C)500 shares.
• D)1,000 shares.

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Definitions:

Variable Production Costs

Costs that fluctuate with the level of output, including expenses like raw materials and direct labor.

Fixed Costs

Costs that remain constant regardless of the amount of goods produced or sold, including lease payments, wages, and insurance fees.

Gross Profit

The difference between a company's sales revenue and its cost of goods sold, representing the profit made before accounting for operating expenses.

Special Order

A one-time customer order often involving unique specifications, which might not fit into the company's standard offerings.