Doreen and Al Are Sales Reps for Competing Product Lines

question 80

Multiple Choice

Doreen and Al are sales reps for competing product lines of school desks in the same state. They run into each other at the Expo Hall for a state convention of high school principals and other education administrators. During a slow period in the Expo Hall, Doreen and Al talk about their upcoming sales pitches a various schools. They discover that they are both pitching to the same schools. Al proposes the following to Doreen, "Why don't you take Winterbury Elementary and I will take Red Stone Middle School?   Just submit a higher bid on Red Stone and I will submit a high bid on Winterbury. That way we both get one contract each." Which of the following statements is correct?

• A) As long as they both bid, there is no problem with their agreement.
• B) As long as they do not mention their prices to each other, there is no problem with their agreement.
• C) This arrangement is a violation of antitrust laws.
• D) Throwing a bid is not an antitrust violation; it is their decision.

Apply overhead to jobs based on direct labor-hours.

Calculate the predetermined overhead rate based on estimated machine-hours.

Understand the relationship between direct materials cost, manufacturing overhead, and the cost of goods manufactured and sold.

Understand and calculate the direct materials cost on the Schedule of Cost of Goods Manufactured.

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Definitions:

Performance

The action of carrying out or accomplishing a task, duty, or undertaking.

Unilateral Contract

A contract in which one party makes a promise in exchange for an act performed by another party, with only the party making the promise being legally bound.

Sheriff's Office

A local law enforcement agency led by a sheriff, responsible for keeping peace, enforcing laws, and executing court orders.

Option Contract

A contract which grants the holder the right, but not the obligation, to buy or sell an asset at a specified price on or before a specified date.