Question

The Mercury Electric Company issued 2,000,000 shares of stock at $62.50 per share. These selling expenses are deducted: commissions 4%, legal fees $2,255,500, advertising $450,000, printing costs $324,400, and accounting fees $386,000. Find the selling expense per share to the nearest cent.

Answer 1

Total expense= sum of all expenses incurred
= commission+legal fees+advertising+printing cost+accounting fees

Total amount of shares sold=$ 2000000 x $62.5
=$ 125000000
commission= 4% of the total amount of shares sold = .04x12500000
=$ 5000000
total expenses= $5000000+$2255500+$450000+$324400+$386000
=$8415900
selling expense/share = $8415900/2000000
=$4.21/shareThe total expense per share is $4.21.