All of the Following Are Characteristics of Common Stock EXCEPT

question 46

Multiple Choice

All of the following are characteristics of common stock EXCEPT:

• A) Tax-deductible dividends
• B) Claims on income and assets which are subordinate to the creditors of the firm
• C) Voting rights which permit selection of the firm's directors
• D) That there is no fixed payment obligation

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Definitions:

Rate Variance

The difference between the expected standard cost and the actual cost incurred, calculated for direct labor rate, overhead rate, or material price.

Standard Direct Labor-Hours

The estimated hours required to produce a units based on standard efficiency and productivity levels.

Labor Efficiency Variance

The difference between the actual hours worked to produce a good or service and the standard hours expected, multiplied by the standard labor rate.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process, often used as a basis for allocating overhead.