Financial Statements for Orange Company Appear Below Total Dividends During Year 2 Were

question 100

Multiple Choice

Financial statements for Orange Company appear below:

$\begin{array}{|l|r|}\hline&\text { Orange Company } \\&\text { Income Statement } \\&\text { For the Year Ended December 31, Year } \\&2\\&\text { (dollars in thousands) }\\\hline \text { Sales (All on Account) } & \$ 2830 \\\hline \text { Costs of Goods Sold } & \$ 1980 \\\hline \text { Gross Margin } & \$ 850 \\\hline \text { Operating Expenses } & \$ 340 \\\hline \text { Net Operating Income } & \$ 510 \\\hline \text { Interest Expense } & \$ 30 \\\hline \text { Net Income before Taxes } & \$ 480 \\\hline \text { Income Taxes (30\%) } & \$ 144 \\\hline \text { Net Income } & \$ 336\\\hline\end{array}$


Total dividends during Year 2 were $\$ 156,000$ , of which $\$ 18,000$ were preferred dividends. The market price of a share of common stock on December 31, Year 2 was $\$ 100$ .
-Orange Company's average sale period (turnover in days) for Year 2 was closest to which of the following?

• A) 20.6 days.
• B) 23.2 days.
• C) 29.5 days.
• D) 33.2 days.

Apply costing methods to compute the inventory valuation.

Analyze the effect of costing methods on financial reporting and managerial decision-making.

Understand cost calculations under absorption costing.

Understand cost calculations under variable costing.

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Definitions:

Service Providers

Companies or individuals who offer services to others, as opposed to selling physical products.

Operations Management

The administration of business practices to create the highest level of efficiency possible within an organization, focusing on converting materials and labor into goods and services as efficiently as possible.

Scheduling Chart

A visual tool used to plan and display the timeline of tasks and activities in a project or process.

Continuous Process

An ongoing operation or production method without interruption or end points.