REFERENCE: Ref.13_02 Mandich Co.had the Following Amounts for Its Assets,liabilities,and Stockholders' Equity

question 54

Essay

REFERENCE: Ref.13_02
Mandich Co.had the following amounts for its assets,liabilities,and stockholders' equity accounts just before filing a bankruptcy petition and requesting liquidation:
Of the salaries payable,$35,000 was owed to an officer of the company.The remaining amount was owed to salaried employees who had not been paid within the previous 80 days: John Webb was owed $10,600,Samantha Jones was owed $15,000,Sandra Johnson was owed $11,900,and Dennis Roberts was owed $2,500.The maximum owed for any one employee's claims for contributions to benefit plans was $800.Estimated expense for administering the liquidation amounted to $40,000.
-What amount would the company would have been expected to pay for every dollar of unsecured liability without priority?
A)$.30.
B)$.40.
C)$.50.
D)$.60.
E)$.75.

• A)$.30.
• B)$.40.
• C)$.50.
• D)$.60.
• E)$.75.

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Definitions:

Variable Costs

Costs that change in direct proportion to the level of production or business activity.

Profit

The financial gain or return derived from an investment, transaction, or operation after subtracting all costs, expenses, and taxes.

Utilization

The extent to which an entity (e.g., equipment, workforce) is being used efficiently to produce goods or services.

Efficiency

The ratio of the output produced to the input resources used in the production process, indicating the effectiveness of resource utilization.