The Actual Ratio of Exchange in a Stock?exchange Acquisition Is

question 40

Multiple Choice

The actual ratio of exchange in a stock?exchange acquisition is the ratio of the

• A) market value per share of the target company to the per share market price of the acquiring firm.
• B) amount paid per share of the target company to the per share market price of the acquiring firm.
• C) book value per share of the target company to the per share market price of the acquiring firm.
• D) amount paid per share of the target company to the per share book value of the acquiring firm.

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Definitions:

Materials Price Variance

The difference between the actual amount paid for materials and the expected (or standard) cost of those materials, multiplied by the quantity of materials purchased.

Direct Material Standards

Standard costs set for the quantity and price of materials required for a manufacturing process.

Purchases Variance

A measurement of the difference between the actual cost of materials and the expected, or standard, cost.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead costs incurred and the standard costs for the actual production volume.