Fact Pattern 2-1 Susan Is an Accountant Who Works in a Company Owned

question 4

Multiple Choice

Fact Pattern 2-1
Susan is an accountant who works in a company owned by Richard. Richard is concerned about the amount of taxes he will owe for the year and asks Susan to falsify his income tax return. Susan refuses. Richard fires her. Susan asks you for advice telling you that Richard is unethical and that she is certain that the law prohibits all unethical conduct.
-Refer to fact pattern 2-1. Which of the following is a theory on which Susan may be able to prevail?

• A) Public policy
• B) Reflective policy
• C) Implied protection
• D) No justification

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Definitions:

Target Costing

A pricing method where the selling price of a product is determined first, and then production costs are managed to ensure the product can be produced within that target cost.

Variable Product Cost

Refers to the costs that vary directly with the level of production output, including costs like raw materials and direct labor.

Contribution Margin

The amount remaining from sales revenue after variable costs have been subtracted, used to cover fixed costs and to generate profit.

Production Capacity

The maximum amount of goods or services that can be produced in a given time period with available resources.