A Firm Wants to Maintain a Minimum Stock Price of $15

question 6

Multiple Choice

A firm wants to maintain a minimum stock price of $15 a share.Due to a recent market downturn,the stock is currently selling for $6 a share.The firm should consider a:

• A)3-for-1 stock split.
• B)4-for-1 stock split.
• C)1-for-3 reverse stock split.
• D)1-for-4 reverse stock split.
• E)1-for-5 reverse stock split.

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Definitions:

Labor Rate Variance

Labor rate variance measures the difference between the actual labor costs incurred and the expected (or standard) labor costs, indicating discrepancies in wage rates or labor efficiency.

Actual Direct Labor Rate

The actual wage rate paid to workers, as opposed to the expected or standard rate used in budgeting or costing.

Direct Labor-hours

The total hours of labor directly involved in the manufacturing process of a product.

Labor Rate Variance

It is the difference between the actual cost of labor and the budgeted or expected cost of labor.