Immediately After the Stock Split, an Investor Who Owned 100

question 115

Multiple Choice

Immediately after the stock split, an investor who owned 100 share before the split will own

• A) 100 shares worth a total of $4200.
• B) 200 shares worth a total of $8400.
• C) 200 shares worth a total of $16,800.
• D) 200 shares with a par value of $8.00 each.

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Definitions:

Fixed Expenses

Costs that do not fluctuate with the level of production or sales, such as rent and salaries.

Contribution Margin

The amount remaining from sales revenue after variable costs are deducted, indicating the capability of covering fixed costs and generating profit.

Variable Manufacturing Costs

Costs that vary in total directly and proportionately with changes in the production volume, including direct materials, direct labor, and variable manufacturing overhead.

Selling Commission

A fee paid to a salesperson or agent for facilitating a sale, typically a percentage of the sale price.