A Stock Dividend Is Issued for the Following Reasons Except

question 38

Multiple Choice

A stock dividend is issued for the following reasons except:

• A) to continue dividends but conserve cash
• B) to reduce the per-share market price of the shares
• C) to reduce total shareholders' equity
• D) to increase the shares account and decrease Retained Earnings

---

Definitions:

Indirect Production Costs

Expenses related to the production process that cannot be directly linked to a specific product, often including maintenance, supervision, and factory utilities.

Direct Material

Raw materials that are directly traceable to the manufacturing of a specific product and constitute a significant portion of the product's cost.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate estimated overhead costs to products or job orders based on a selected activity base.

Direct Labour Hours

The total time workers spend producing goods or delivering services, directly tied to the production output.