Which of the following correctly describes the term cost driver?
A) the inflation rate that causes costs to rise
B) the average inventory costs incurred at any point of time
C) the primary factor that causes a cost to be incurred
D) the total material, labor, and overhead costs of a completed job
C) the primary factor that causes a cost to be incurred
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Which of the following is not true of a corporation?
A) It may enter into binding legal contracts in its own name. B) It may sue and be sued. C) The acts of its owners bind the corporation. D) It may buy, own, and sell property.
Define "cross subsidies" and tell what kind of product costing system is likely to have them. What happens to cross subsidies in activity-based costing (ABC)?
The CEO of Big Ships knows his company has won a $2 billion contract to build ships for the Navy. He is told by the Navy to keep this quiet until the official announcement. Knowing that Big Ships stock will rise when the announcement is made, he tells his children to buy as much Big Ships stock as they can right away. He does not buy any stock. The CEO may:
a. not be sued for insider trading since he did not engage in trades; his relatives can be sued b. not be sued for insider trading because he did not engage in trades; his relatives may not be sued because they have no relation to the company c. not be sued for insider trading under the Supreme Court rule in the Dirks case d. be sued only if his employment contract or contract with the Navy prohibits trading e. none of the other choices
Budgeting is an informal plan for future business activities.
Answer the following statement true (T) or false (F)