A Pro-Rata Share Rights Offer of 1: 5 Gives Existing

question 68

Multiple Choice

A pro-rata share rights offer of 1: 5 gives existing shareholders:

• A) the right to purchase one new share for every five shares held.
• B) the right to purchase five new shares for every one share held.
• C) the right to purchase one share for every 1/5 shares held.
• D) the right to purchase 10 shares for every five shares held.

---

Definitions:

Budget Variances

The difference between budgeted and actual figures for revenues or expenditures, indicating under or overspending.

Underapplied

A situation where the allocated manufacturing overhead costs are less than the actual overhead costs incurred, leading to underestimation of product costs.

Overapplied

A condition where the allocated amount of indirect costs exceeds the actual amount incurred.

Variable Overhead Efficiency

The variance indicating the efficiency with which a variable overhead cost is incurred in relation to an activity level, such as machine or labor hours.