The Par Value Per Share of Common Stock Represents

question 17

Multiple Choice

The par value per share of common stock represents

• A) the minimum selling price of the stock established by the articles of incorporation.
• B) the minimum amount the stockholder will receive when the corporation is liquidated
• C) an arbitrary amount established in the articles of incorporation
• D) the amount of dividends per share to be received each year

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Definitions:

Direct Materials

Direct materials refer to the raw materials that become an integral part of the finished product and can be easily traced back to it.

Direct Labor-Hours

Complete work hours of employees directly incorporated in production tasks.

Variable Overhead

Indirect production costs that vary with the level of production, such as electricity costs or materials used in the maintenance of machinery.

Manufacturing Overhead

All indirect costs associated with manufacturing, such as indirect materials, indirect labor, and other overhead costs.