If a Corporation Has Only One Class of Stock, It

question 103

Multiple Choice

If a corporation has only one class of stock, it is understood to be:

• A) preferred stock.
• B) common stock.
• C) contributory stock.
• D) equity stock.

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Definitions:

Absorption Cost

A comprehensive approach to product costing that includes all types of manufacturing costs: direct materials, direct labor, and both fixed and variable manufacturing overhead.

Overhead Absorption Rate

The rate at which indirect costs are allocated to produced goods or services.

ABC System

Activity-Based Costing; a method of assigning overhead and indirect costs to specific products or projects, based on their usage of activities.

Single-Base Allocation

A cost allocation method where overhead costs are distributed based on a single criterion or cost driver.