Business risk resulting from uncertainty over a firm's earnings is a concern for stockholders, but not for debt holders
Indicate whether the statement is true or false.
Answer: FALSE
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Kirby subscribed to purchase 10,000 shares of stock to be issued by Globule Inc., an existing corporation. Globule accepted the subscription. The price set forth in the subscription agreement was $10 per share. When the time came for Kirby to pay the amount of his subscription, Kirby paid only $6 per share, claiming that such an amount represented the fair value of the shares. Globule delivered the stock certificates to Kirby for $6 per share. Is Kirby liable to Globule for the other $4 per share?
A. No, but he is liable for another $2 per share. B. No, because regardless of what the subscription price was, he cannot be forced to pay more than the fair market value of the shares. C. Yes, because Globule's stock does not have a par value. D. Yes, because regardless of the fair value, a purchaser is liable for stocks issued for less than the par value.
Poole Products Inc Poole Products Inc has the following product information available: Sales price $25 per unit Variable costs $10 per unit Fixed costs $36,000 Refer to the Poole Products Inc information above. How many units need to be sold in order to earn a target profit of $249,000?
A) 8,143 units B) 14,200 units C) 16,600 units D) 19,000 units
Ramirez Corporation sells two types of computer hard drives. The sales mix is 30% (Q-Drive) and 70% (Q-Drive Plus). Q-Drive has variable costs per unit of $90 and a selling price of $150. Q-Drive Plus has variable costs per unit of $105 and a selling price of $195. The weighted-average unit contribution margin for Ramirez is
A. $50 B. $71 C. $80 D. $81
A company estimates that costs for the next year will be $500,000 for indirect labor, $50,000 for factory utilities, and $1,000,000 for the CEO's salary. The company uses machine hours as its overhead allocation base. If 25,000 machine hours are planned for this next year, then the plantwide overhead rate is $22 per machine hour.
Answer the following statement true (T) or false (F)