Jackson Is a Car Purchasing Agent for Highway Motors,a Used

question 20

Essay

Jackson is a car purchasing agent for Highway Motors,a used car dealer.Jackson attends wholesale auto auctions and notices that some autos have consistently greater demand and higher prices.Jackson forms a car purchasing partnership with Viva Inc.to buy these cars from "for sale by owner" advertisements and then sell them in Viva's name at the auto auctions where Jackson purchases them for Highway.Discuss if Jackson has violated any duty he owes Highway Motors.

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Definitions:

Direct Costing

A cost accounting method where only variable costs (direct materials, direct labor, variable manufacturing overhead) are included in product costs, fixed overhead costs are expensed in the period they are incurred.

Cost Of Goods Manufactured

The total cost of making and finishing a product.

Variable Manufacturing Costs

Expenses that vary proportionally with production volume, such as materials and labor.

Variable Costing

A costing method where only variable production costs are included in product costs, with fixed overhead costs treated as period expenses.