You are considering buying some stock in Continental Grain. Which of the following is an example of nondiversifiable risk?
A) Risk resulting from a general decline in the stock market
B) Risk resulting from a news release that several of Continental's grain silos were tainted
C) Risk resulting from an explosion in a grain elevator owned by Continental
D) Risk resulting from an impending lawsuit against Continental
Answer: A
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The purchasing manager was able to bring down the cost of direct materials by purchasing direct materials of a slightly lower grade quality than the company had used previously. The lower grade of direct materials, however, meant a higher defect rate on the assembly line and a higher waste of direct materials during production, which in turn lowered operating income. This situation would lead to a(n) ________.
A) favorable direct materials cost variance B) unfavorable direct labor cost variance C) favorable direct labor efficiency variance D) favorable direct materials efficiency variance
In which of the following ways does drug testing differ from polygraph testing as part of a hiring process?
a. Drug testing provides less conclusive test results than does polygraph testing. b. Drug testing is far more controversial as a candidate screen than polygraph testing. c. Drug testing is far more expensive than polygraph testing because it cannot be done in-house. d. Drug testing is sometimes mandatory in nongovernmental industries; polygraph testing never is.
What are the advantages and disadvantages of decentralization within an organization?
Bob, a house builder, contracts with Ollie to build a house on Ollie's lot. The total price of the construction is $100,000, $20,000 of which will be Bob's profit. After Bob has put $10,000 worth of materials into the house, Ollie wrongfully refuses to let him finish the house. If Bob sues for damages, he will be able to collect
a. $10,000. b. $20,000. c. $30,000. d. $100,000.