Which of the Following Statements Is CORRECT

question 10

Multiple Choice

Which of the following statements is CORRECT?

• A)If Firms X and Y have the same P/E ratios, then their market-to-book ratios must also be equal.
• B)If Firms X and Y have the same net income, number of shares outstanding, and price per share, then their P/E ratios must also be the same.
• C)If Firms X and Y have the same earnings per share and market-to-book ratio, they must have the same price/earnings ratio.
• D)If Firm X's P/E ratio exceeds that of Firm Y, then Y is likely to be less risky and/or be expected to grow at a faster rate.
• E)If Firms X and Y have the same net income, number of shares outstanding, and price per share, then their market-to-book ratios must also be the same.

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Definitions:

Total Variance

The difference between the actual costs incurred and the standard costs, summarizing all variances in cost accounting to analyze overall performance.

Direct Labor Quantity Variance

This refers to the difference between the actual labor hours worked and the standard labor hours that should have been worked for the actual level of production, multiplied by the standard hourly wage rate.

Direct Labor Cost

The expense incurred by a company for wages, benefits, and other costs for employees who work directly on the manufacturing of products.

Produced

Refers to the quantity of goods or services created by a company during a specific time period.