Refer to Fact Pattern 13-1

question 350

Multiple Choice

Refer to Fact Pattern 13-1. An advantages for Jeanette of incorporating is that:

• A) she has unlimited liability for corporation debts
• B) the corporate veil may never be pierced
• C) she has limited liability for corporation debts
• D) she is taxed personally for all corporation profits
• E) she must dissolve the corporation before she adds new members to the firm

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Definitions:

Direct Labor Hours

The total time workers spend working directly on manufacturing a product or providing a service, which is often used in allocating manufacturing overhead.

Normal Capacity

The maximum production level or volume of activity that can be achieved under normal conditions by a business.

Normal Spoilage Costs

Costs associated with the expected amount of waste or inefficiency during a production process, considered a normal part of manufacturing.

Direct Materials Price Standard

The predetermined cost per unit of material, used in setting a budget and controlling costs.