The Par Value of the Common Stock of a Large

question 32

Multiple Choice

The par value of the common stock of a large listed corporation:

• A)Tends to establish a ceiling for the market price of the stock.
• B)Tends to establish a floor for the market price of the stock.
• C)Represents legal capital and is not related to the market price of the stock.
• D)Is increased by net income and decreased by dividends.

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Definitions:

Flexible Manufacturing Overhead Budget

A plan that estimates the variable and fixed overhead costs for each level of production activity.

Direct Labor Hour

A measure of the labor directly involved in producing goods or services, expressed in hours.

Volume Overhead Variances

The difference between the budgeted overhead costs based on expected volume and the actual overhead costs incurred.

Controllable Variance

The difference between actual and budgeted performance that can be directly managed or controlled by responsible managers.