Which of the Following Has No Effect on the Computation

question 61

Multiple Choice

Which of the following has no effect on the computation of earnings per share for the current period?

• A) The amount of cash dividends declared or paid to preference shareholders.
• B) The amount of cash dividends declared or paid to ordinary shareholders.
• C) Profit.
• D) The number of shares of ordinary share authorized.

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Definitions:

Fixed Selling Expense

Costs associated with the selling process that do not vary with the level of sales, such as salaries of sales personnel and rent for sales space.

Variable Administrative Expense

Indirect costs that change in proportion with the level of a company’s production or sales activities.

Fixed Administrative Expense

Expenses that do not change with the level of production or sales over a certain period, related to the administration of a business.

Contribution Format

An income statement format that separates fixed and variable costs to show the contribution margin.