Miriam Worked as a Financial Advisor with Acme Investments Inc

question 25

Multiple Choice

Miriam worked as a financial advisor with Acme Investments Inc.Over the period of several years, she stole millions of dollars from the company's clients.She did so by means of a complex and carefully planned series of fraudulent transfers.The company had no reason to believe that anything was wrong until the police arrived one day and explained the entire situation to Acme's president.Which of the following statements is TRUE?

• A)If the company's clients sue Miriam in tort law, she automatically has the right to rely on any liability insurance policy that Acme purchased for itself.
• B)As a result of tort law's deterrence function, an employer is vicariously liable for every tort that an employee commits during normal business hours.
• C)Acme may be held vicariously liable even though it had no reason to believe that Miriam was acting improperly.
• D)Acme may have liability insurance against personal liability, but it cannot have liability insurance against vicarious liability.
• E)The doctrine of vicarious liability means that Acme has a duty to defend Miriam if she is sued in tort.

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Definitions:

Variable Overhead Efficiency Variance

The difference between the actual and standard cost of variable overhead based on the efficient use of production resources.

Machine-Hours

A measure of production output or activity based on the total hours machines are operated in the manufacturing process.

Overhead Rate

A calculation used to allocate indirect costs to products or services, typically expressed as a rate per unit of activity (e.g., labor hours or machine hours).

Standard Cost System

A cost accounting system that assigns fixed costs for materials, labor, and overhead to products, allowing for variance analysis.