Ingel Is a Director in MIV Inc

question 18

Multiple Choice

Ingel is a director in MIV Inc.,a large,successful software development company.He entered into a contract involving the sale of software he developed to MIV Inc.In law,this is a self dealing contract.Why is it enforceable?

• A) Political lobbying efforts have successfully avoided a blanket prohibition of self dealing.
• B) Ingel's self dealing is permissible if the governance committee has given assurance it is not a rip off.
• C) Ingel provided a written disclosure and abstained from voting on the fair and reasonable deal.
• D) Self dealing contracts are permissible if an oversight committee has confirmed the deal is not a rip off.

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Definitions:

Predetermined Overhead Rates

Rates used to allocate manufacturing overhead costs to products, typically based on estimated costs and activity levels at the beginning of a period.

Direct Labor Cost

The total cost associated with employing workers who directly manufacture products or perform services, including wages and other benefits.

Overhead Applied

The process of allocating estimated overhead costs to individual products or job orders based on a predetermined rate or method.

Estimated Total Manufacturing Overhead

The projected total costs associated with the manufacturing process that are not directly tied to the production of goods.