With a Stock Repurchase

question 65

Multiple Choice

With a stock repurchase:

• A)no cash flow is extended from the company.
• B)the company obtains some of its stock, and the value of the firm drops.
• C)shareholders' ownership in the company will decrease.
• D)the equity of the firm will increase.

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Definitions:

Labor Rate Variance

The difference between the actual labor rate paid and the standard rate expected, multiplied by the total hours worked.

Labor Efficiency Variance

The variance between the real hours spent producing a good or service and the anticipated standard hours, times the standard wage rate.

Variable Overhead Rate Variance

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

Variable Overhead Efficiency Variance

A measure used in cost accounting to evaluate the efficiency of variable production costs, comparing the actual hours worked to the standard hours expected.