Which of the Following Is an Example of Direct Materials

question 247

Multiple Choice

Which of the following is an example of direct materials cost for an automobile manufacturer?

• A) cost of oil lubricants for factory machinery
• B) cost of wages of assembly worker
• C) salary of production supervisor
• D) cost of interior upholstery

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Definitions:

Independent Director Control

A theory of corporate control that states that the best way to make certain that corporate decisions are made in the best interests of the corporation is to make sure that the decision makers themselves are not affected by the decisions.

Corporate Democracy

The system or practices within a corporation that allow for the participation and voting rights of shareholders in company decision-making processes.

Business Judgment Rule

A legal principle that protects the decisions of corporate directors and officers, made in good faith and with reasonable diligence, from being second-guessed by courts.

Fairness Rule

The rule that requires managers to be fair to the corporation when they personally benefit from their business decisions.