A Stock Dividend Usually Causes a Transfer of Retained Earnings

question 14

True/False

A stock dividend usually causes a transfer of retained earnings to share capital, but not a decrease in the assets of the issuing corporation.

---

Definitions:

Variable Manufacturing Overhead

Costs that vary with production volume, such as indirect materials and utilities, related specifically to the manufacturing process.

Labor-Hours

The total number of working hours clocked by employees within a specific period, reflecting the labor input.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to individual units of output on the basis of some common activity, such as machine-hours or labor hours.

Labor Cost

The total expense incurred by a company for the compensation of its employees.