Which of the Following Statements Is False

question 15

Multiple Choice

Which of the following statements is false?

• A)Costs are larger in percentage terms when a smaller amount of capital is raised.
• B)Book-building is more common for large floats and privatisations in Australia than the open pricing mechanism of price setting.
• C)An underwriter may no longer be obligated to take up the shortfall of an issue during times of war.
• D)A possible reason for floating a private company is to realise capital gains.

---

Definitions:

Absorption Costing

A bookkeeping approach incorporating the total manufacturing expenses, which include the cost of direct materials, wages for labor directly involved in manufacturing, and all overheads, be they variable or fixed, into the product's cost.

Fixed Manufacturing Overhead

Costs associated with the production process that do not change with the level of output, such as rent, salaries, and utility expenses.

Production Volume

The total number of units of a product or service produced over a specific period.

Sales Volume

The total number of units of product sold during a specific period.