What Are the Effects of Stock Splits and Stock Dividends

question 25

Essay

What are the effects of stock splits and stock dividends? Why are they popular?

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Definitions:

Cost Driver

A factor, such as machine-hours, beds occupied, computer time, or flight-hours, that causes overhead costs.

Activity Variances

Differences between planned activities (budgeted) and actual activities in management accounting, used for monitoring performance and guiding decisions.

Flexible Budget

A budget that adjusts or flexes with changes in the volume or activity level, allowing for better budgetary control under different operational circumstances.

Actual Activity

The real measure of activity achieved in a given period, such as units produced, machine hours, or labor hours.