Which of the Following Statements About Stock Option Plans Is

question 93

Multiple Choice

Which of the following statements about stock option plans is false?

• A)Offering stock options to a company's managers reduces the likelihood they will not always act in the best interest of the investors.
• B)Stock option plans are often a major part of an executive's compensation plan.
• C)Stock options usually have a grant price equal to the market price of the share when the options are first offered to the executives.
• D)The holder of a stock option has an interest in a company's performance but not in the same manner as a shareholder.

---

Definitions:

Job Order Cost

The cost calculated for a specific customer order, taking into account direct labor, direct materials, and allocated overhead.

Process Cost Systems

Accounting systems used to apply costs to similar products that are mass-produced in a continuous fashion.

Direct Labor

The wages of employees who are directly involved in the production of goods or services.

Overhead Costs

Expenses related to the general operation of a business that are not directly tied to the production of goods or services, such as utilities and administrative salaries.