When a portion of employees' pay is based on a measure of performance it is called variable pay.

Which of the following is a reason why the stock price of a firm might drop when a seasoned equity issue is announced?

A) Managers know the stock is overvalued, so they are selling it while the price is low.
B) Issuing new equity may indicate the firm has too little debt or excess liquidity.
C) Stockholders are just acknowledging the fact that if the firm were to issue debt instead, existing shareholders would have to share the gain with the new investors.
D) It is expensive to issue securities and stockholders are just recognizing the loss in value the firm will incur by paying out this money.
E) There may be a simple supply and demand problem, that is, the additional share will be in great demand and price usually drops when demand rises.

According to current GAAP,convertible bonds must be recorded at the value of debt only,with no value assigned to the conversion feature.

When an employer that controls the demand for labor opposes a union that controls the supply of labor,it is called

A) an oligopoly.
B) an oligarchy.
C) a bilateral monopoly.
D) a monopsony.

Utility is the:

A) difference between a firm's total revenue and its total economic cost.
B) good not adequately provided by a free market and usually provided by the government.
C) satisfaction consumers derive from their consumption of goods and services.
D) lowest price that buyers are willing to pay for a given quantity of a good.

In April, one of the processing departments at Terada Corporation had beginning work in process inventory of $21,000 and ending work in process inventory of $27,000. During the month, $244,000 of costs were added to production and the cost of units transferred out from the department was $238,000. In the department's cost reconciliation report for April, the total cost to be accounted for under the weighted-average method would be:

A) $48,000
B) $265,000
C) $530,000
D) $509,000