[Disputed Dominion] Congress Set Up a New Agency to More

question 75

Multiple Choice

[Disputed Dominion] Congress set up a new agency to more closely regulate testing of personal and cosmetic products on animals. Legislation was passed naming the agency the "Animal Protection Commission," and setting forth the function of the agency and its specific powers. Congress provided the agency with the power to make rules, investigate violations, and adjudicate charges of wrongdoing. The agency proceeded to properly give notice and issue rules. The rules provided for civil as well as for criminal penalties. Agency personnel issued an order for ABC Co. to attend a hearing regarding its animal testing and to bring to the hearing all company documents pertaining to animal testing. ABC Co. resisted on the basis that the agency had no power to compel its attendance at a hearing or to require it to provide any documents. ABC Co. also claimed that agencies do not have the power to impose criminal penalties. The agency proceeded to issue a ruling that ABC Co. cease all activity based upon its refusal to cooperate.
-Which of the following is true regarding the claim of ABC Co. that agencies have no power to issue rules containing criminal penalties?

• A) ABC Co. is correct.
• B) ABC Co. is incorrect, but any criminal penalties enforced by an agency may not exceed a fine of $1,000.
• C) ABC Co. is incorrect, but any criminal penalties enforced by an agency may not exceed a fine of $10,000.
• D) ABC Co. is incorrect regarding its claim that all agencies lack the authority to enforce a criminal penalty, but correct in that the Animal Protection Commission cannot enforce a criminal penalty because an agency can only enforce a criminal penalty if human health or national security is involved.
• E) ABC Co. is incorrect, and the Animal Protection Commission can enforce criminal penalties.

---

Definitions:

Direct Materials

Raw materials that can be directly attributed to the production of specific goods or services.

Direct Materials

are raw materials that can be directly attributed to the production process of a specific product, such as wood for furniture or metal for cars.

Break-even Points

The level of production or sales at which total revenues equal total expenses, resulting in no net profit or loss.

Common Fixed Expenses

These are fixed costs that do not vary with the volume of production or sales, such as utilities, rent, or administrative salaries, shared across different products or departments.