Use the Following to Answer Questions

question 152

Multiple Choice

Use the following to answer questions
The 12/31/2016 balance sheet of Despot Inc.included the following:

-Despot declared a property dividend to give marketable securities to its common stockholders.The securities had cost Despot $7 million and currently have a fair value of $16 million.Which of the following would be included in recording the property dividend declaration?

• A)Increase in a liability for $16 million.
• B)Decrease in retained earnings for $7 million.
• C)Decrease in marketable securities by $16 million.
• D)All of these answer choices are correct.

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Definitions:

Product Cost

The total cost associated with producing a product, including direct labor, direct materials, and manufacturing overhead.

Variable Costs

Expenses that vary directly with levels of production or sales volume.

Cost Behaviour

The way in which costs change or remain stable in relation to variations in business activity levels, categorized into fixed, variable, and mixed costs.

Total Unit Costs

The complete cost incurred to produce, store, and sell one unit of a product, including direct materials, labor, and overhead.