CityScape Company Repurchased 10,000 Shares of Its Own $5 Par

question 176

Multiple Choice

CityScape Company repurchased 10,000 shares of its own $5 par value common stock for $10 per share. The company later reissued 5,000 shares for $15 per share. These transactions resulted in a:

• A)$100,000 increase in paid-in capital.
• B)$25,000 increase in paid-in capital.
• C)$25,000 gain on the sale of treasury stock.
• D)$100,000 gain on the sale of treasury stock.

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Definitions:

Activity-Based Costing

A costing method that identifies the activities in an organization and assigns the cost of each activity according to the actual consumption by each.

Manufacturing Overhead

includes all manufacturing costs that are not directly related to the production of goods, such as factory rent, utilities, and maintenance expenses.

Unit Product Cost

The cumulative expense of manufacturing a single product unit, encompassing direct materials, direct labor, and overhead costs related to production.

Predetermined Overhead Rate

A rate used to allocate overhead costs to products or services, calculated before the actual costs are known, based on estimated costs.