On January 1, 2019, Cocker Reacquired 8,000 of the Outstanding

question 112

Multiple Choice

On January 1, 2019, Cocker reacquired 8,000 of the outstanding shares of its own common stock for $34 per share.None of these shares belonged to Popper.How would this transaction have affected the additional paid-in capital of the parent company?

• A) $0.
• B) Decrease it by $32,900.
• C) Decrease it by $45,700.
• D) Decrease it by $23,100.
• E) Decrease it by $50,500.

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Definitions:

Net Operating Income

Revenue from the primary business activities of a company, with no deductions for interest and taxes.

Variable Manufacturing Overhead

Variable manufacturing overhead refers to the manufacturing costs that vary with the level of production output, such as utilities and certain labor costs.

Variable Cost

Costs that vary directly with the level of production or volume of output.

Fixed Cost

A cost that remains constant regardless of the level of goods or services produced within a certain range.