Which of the Following Statements Regarding Reverse Mergers Is True

question 29

Multiple Choice

Which of the following statements regarding reverse mergers is true?

• A)In a reverse merger, money flows out of the public sector into the private sector.
• B)In a reverse merger, a large, publicly-held company spins off one of its divisions, which itself becomes a publicly-traded company.
• C)A reverse merger is a method of making a publicly-held firm private once again.
• D)In a reverse merger, a large, privately-held firm merges with a smaller firm that is publicly-held.

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Definitions:

Unit Product Cost

The complete expense incurred to manufacture a single item, encompassing materials, workforce, and indirect costs.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes to covering fixed costs.

Variable Costing

A bookkeeping approach that incorporates just the variable costs of production (such as direct materials, direct labor, and variable factory overheads) into the costs of products.

Variable Costing

A costing method that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in product costs, excluding fixed overhead.