Donatello is a director and officer of Enzio's Pizza Corporation. Donatello selects an ad campaign that consumers find offensive-a marketing decision that results in a dramatic decrease in profits for the firm and its shareholders. The shareholders
accuse Donatello of breaching his fiduciary duty to the corporation. What is Donatello's best defense against this accusation? Later, a resolution comes before Enzio's board to expand its menu to compete with Fabio's Pasta Palace Restaurants Inc Donatello is a director and shareholder of Fabio's. What is Donatello's responsibility in this situation?
The best defense in this context is the business judgment rule. As long as a director or officer does what is necessary to be informed, and acts in good faith, in what he or she considers to be the best interests of the corporation, and with the care that an ordinarily prudent person would use in similar circumstances, he or she is not liable simply because a decision has a negative result.
As for the resolution involving a different corporation, a director cannot support a business that competes directly with a corporation on the board of which the director sits. The director's fiduciary duty requires him to fully disclose the conflict of interest. Most likely, the director in these circumstances will have to resign from one of the boards.?
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Which of the following is a function of a steroid?
A. insulation against cold B. protective layer C. transmission of genetic information D. sex hormone E. long term energy storage
A company's net sales were $727,700, its cost of goods sold was $244,510 and its net income was $62,450. Its gross margin ratio equals:
A. 66.4%. B. 33.6%. C. 25.5%. D. 297.6%. E. 8.6%.
The following data is given for the Bahia Company: Budgeted production 1,000 units Actual production 980 units Materials: Standard price per lb $2.00 Standard pounds per completed unit 12 Actual pounds purchased and used in production 11,800 Actual price paid for materials $23,000 Labor: Standard hourly labor rate $14 per hour Standard hours allowed per completed unit 4.5 Actual labor hours
worked 4,560 Actual total labor costs $62,928 Overhead: Actual and budgeted fixed overhead $27,000 Standard variable overhead rate $3.50 per standard direct labor hour Actual variable overhead costs $15,500 Overhead is applied on standard labor hours. The factory overhead controllable variance is: A) 65U B) 65F C) 540U D) 540F
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