Stock Options Do Not Affect the Calculation Of

question 188

Multiple Choice

Stock options do not affect the calculation of:

• A) Diluted EPS.
• B) Weighted-average common shares.
• C) The denominator in the diluted EPS fraction.
• D) Basic EPS.

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Definitions:

Overhead Rate

The rate at which indirect costs are allocated to products or services, often used in calculating the total cost of production.

Fixed Overhead

Regular, fixed costs that do not vary with the level of production or sales, such as rent, salaries, and insurance.

Capacity

The maximum amount of goods or services a company can produce or deliver in a given period with existing resources.

Allocation Base

A criterion or measure used for distributing overhead costs among various products, services, or departments within a business.