Outside Members of the Board of Directors Are Usually Chosen

question 112

Multiple Choice

Outside members of the board of directors are usually chosen

• A) because they represent part of the organization's general environment.
• B) to reduce the requirement for inside directors who come from the same industry.
• C) to provide a particular expertise.
• D) to reduce scrutiny by government agencies.
• E) to preclude the conflicts of interest that could arise if top managers from the organization were selected.

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Definitions:

Variable Cost

Costs that change in proportion to the level of production or business activity, such as materials and labor.

Income Statement

A fiscal report displaying a business's incoming funds, outgoings, and profit for a designated time frame.

Relevant Range

The span of activity level within which the assumptions about variable and fixed cost behaviors hold true.

High-low Method

A technique used in managerial accounting to estimate fixed and variable costs by analyzing the highest and lowest levels of activity and the associated costs.