In an Employment Contract, Agreements Not to Compete Are

question 42

Multiple Choice

In an employment contract, agreements not to compete are:

• A) illegal.
• B) uniformly held to be in the public interest and therefore legal.
• C) never questioned by the court.
• D) valid, if the restriction is reasonable and necessary for the protection of the benefited party.

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Definitions:

Direct Labor

Labor costs directly attributed to the production of goods or services, such as wages of workers on the assembly line.

Fixed Manufacturing Overhead

Costs associated with manufacturing that do not change with the level of production, such as salaries of supervisors and factory rent.

Raw Materials

Basic substances in their natural, modified, or semi-processed state, used as inputs for manufacturing.

Standard Cost System

A cost accounting system that uses standard costs for inventory valuation and cost control, comparing actual costs to standard costs to assess performance.