Bowman, Inc

question 45

Multiple Choice

Bowman, Inc., has only variable costs and fixed costs. A review of the company's records disclosed that when 200,000 units were produced, fixed manufacturing costs amounted to $800,000 and the cost per unit manufactured totaled $11. On the basis of this information, how much cost would the firm anticipate at an activity level of 205,000 units?

• A) $2,235,000.
• B) $2,222,000.
• C) $2,214,000.
• D) $2,200,000.
• E) None of the other answers is correct.

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Definitions:

Total Paid-In Capital

The total amount of capital that a company has received from shareholders in exchange for shares of stock.

Retained Earnings

The portion of net income that is retained by the corporation rather than distributed to its shareholders as dividends.

Total Stockholders' Equity

This represents the total amount of capital contributed by shareholders plus the retained earnings of a company, indicating the net worth of the company from a shareholder's perspective.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares, although the market capitalization remains the same.